5 September 2017

Gambia: More Money in Circulation, Says Central Bank

The amount of money in circulation in The Gambia has increased by more than 20 per cent, the highest amount in more than 10 years, data from the Central Bank have indicated.

"Money supply grew by 21.7 per cent in June 2017," CBG Governor Bakary Jammeh said at the recent Monetary Policy Committee press briefing.

Economic analysts said an increase in the supply of money lowers interest rates, which in turns generates more investment and puts more money in the hands of consumers, thereby stimulating spending.

Commercial banks in the country have already started to reduce their interest rates. Mega Bank, for instance, last week announced a reduction in its prime lending rate.

Meanwhile, the Central Bank said quasi money, which includes savings account balances and Treasury bills, has increased by 24.2 per cent to D13 billion as at end June 2017.

Inflation declines

Consumer price inflation, the average prices of consumer goods and services, is trending downwards, Governor Jammeh said.

Headline inflation, a measure of the total inflation in an economy, declined to 8 per cent in July 2017 from a high of 8.8 per cent in January 2017.

Jammeh said this was due largely to the decline in food inflation from 10.1 per cent to 8.7 per cent as at end June 2017.

"In the light of these developments, inflation is projected to continue to decline in the near-term," the governor said.

Positive outlook

The economic conditions of the country continue to improve in 2017 and the outlook remains "broadly favourable", Governor Jammeh said.

The favourable outlook is premised on projected increase in agricultural production, increased remittances, rebound in tourism and trade and restoration of confidence in the domestic economy.

"Moreover, monetary and fiscal policies would remain prudent and well coordinated," he said, adding that foreign exchange market conditions are expected to continue to improve and the Dalasi would remain stable.

From May to end July, 2017, the Dalasi appreciated against the US Dollar and Pound Sterling by 0.9 per cent and 0.4 per cent respectively. However, the Dalasi, depreciated against the Euro by 4.3 per cent.

The major risk to the positive economic outlook, the governor said, is the level of debt-to-GDP ratio inherited from the past regime.

President Adama Barrow took over the government with debt of 120 per cent of gross domestic product (GDP). As at end December 2016, the total debt stock of the government stood at D48.3 billion comprising D20.3 billion external and D28 billion domestic.


African Nations Pledge to Use Trade to Reduce Poverty

Gambia's Vice President and Minister for Women's Affairs, Fatoumata Jallow-Tambajang, says trade has been a strategic… Read more »

See What Everyone is Watching

Copyright © 2017 The Point. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.