Pursuant to Section 48 of the Bank of Sierra Leone Act, 2019, Section 1 of the Other Financial Services Act, 2001 and the Bank of Sierra Leone (Amendment Act, 2023), the Bank of Sierra Leone has in a Public Notice dated 19th September, 2023 directed that all development project funds meant for Sierra Leone that are channelled through foreign exchange brokerage firms stands review.
‘International and local brokerage firms shall be traded at the Reference or Average Market Rate (mid-rate) published daily by the Bank of Sierra Leone,’ the notice stated, and urged that defaulters, be they persons or financial institutions who fail to comply with the directives, shall be liable to pay such fines or penalty as may be determined by the Bank of Sierra Leone.
The decision was reached at in consultation with the Ministry of Finance and the Ministry of Planning and Economic Development.
The central bank observes with concern that the practice of brokers in offshore trading of funds provided by development partners in foreign currency, meant for the implementation of projects by Non–Government Organisations in Sierra Leone, are bided at higher exchange rates, with pass through effect to domestic prices.
‘The consequent higher inflationary pressures fuelled by the excess volatility of the exchange rate are adversely affecting the prices of essential commodities,’ the notice read.
The Bank of Sierra Leone registered its profound appreciation of the efforts of partners who are supporting development projects in the country. The central bank added that the activities of foreign exchange brokers should not be seen to be undermining the aspirations of partners to reduce poverty and enhance the wellbeing of citizens.
