By Hassan Osman Kargbo

Following a Monetary Policy Committee- MPC meeting held on 6 July 2023, which was organised by the Bank of Sierra Leone to review recent macroeconomic and financial developments, the Bank has informed the public that the overall fiscal deficit widened to NLe1.81bn in the first quarter of 2023, from NLe0.85bn in the fourth quarter of 2022.     

According to BSL, the total government revenue declined more than the reduction in government expenditures in the country, for which they stated that with that decline in the domestic revenue, the MPC was of the view to implement policy measures to reduce discretionary spending.

‘With the decline in the domestic revenue, the MPC was of the view that implementation of policy measures to reduce discretional spending and raise tax revenue, while freeing up resources for priority expenditure, should be accelerated,’ as per the Bank of Sierra Leone presser as advertised in local media.

According to the Bank’s Monetary Policy Committee statement, the committee met and reviewed recent macroeconomic and financial developments in the global and domestic environments and their implications for domestic inflation and growth.

‘Following the deliberations, the MPC decided to increase the Monetary Policy Rate by 0.50 percentage points, to 19.25 per cent,’ said the Bank.

The Bank summarised its assessments and key considerations that informed the Committee’s decision on the stance of monetary policy, including: global economic developments, inflation outlook, domestic economic activity, external sector developments, fiscal developments, and money and banking.

Concluding, the MPC acknowledged that current inflationary pressure poses a challenge for a domestic microeconomic stability and the potential impact on real household incomes.

Hence since 10 July 2023, the following rates have been published for the information of the public: Monetary Policy Rate (MPR) 19.25 per cent; Standing Lending Facility Rate (SLFR) 22.25 per cent; Standing Deposit Facility Rate (SDFR) 12.75 per cent.