Gambiaj.com – (BANJUL, The Gambia) — Buah Saidy, the governor of the Central Bank of The Gambia (CBG), announced a significant policy shift revealing the introduction of a single exchange rate policy to stabilize the national currency, the dalasi.

During the Mansa Kunda Ministerial Town Hall meeting held at the Sir Dawda Kairaba Jawara Conference Centre in Bijilo and organized by the Ministry of Information, Saidy elaborated on the bank’s transition from a reference rate to a single exchange rate, now termed the policy rate. This move aims to enhance confidence in the dalasi and bridge the gap between the official foreign exchange market and the parallel “black market.”

“We also revised the foreign exchange guideline, which has increased the flow of foreign currency in the foreign exchange market,” Saidy stated. He noted that the differential between the official market and the black market had narrowed significantly, now standing at approximately 98 bututs. Saidy reiterated the illegality of the black market and urged operators to register as foreign exchange bureaux with the Central Bank.

Enforcing the law against black market operators poses challenges, Saidy observed. “Chasing and arresting agents of the black market will drive them underground, causing hoarding and impacting foreign currency availability and the exchange rate,” he warned. Instead, the CBG encourages these operators to register formally, promising equal opportunities within the legal framework.

Saidy also discussed the factors influencing the dalasi’s stability, emphasizing the importance of foreign currency availability and the Central Bank’s reserves. “Are we having the adequate reserve to support the exchange rate of the country and meet the demand for financing international trade and services?” he questioned.

The Gambia’s foreign currency supply relies on limited exports, primarily groundnuts, donor support, tourism, and diaspora remittances. Saidy concluded by highlighting that the same international economic factors affecting global markets also influence The Gambia’s exchange rate stability.

The introduction of a single exchange rate policy marks a significant step towards stabilizing the dalasi, aiming to foster a more transparent and efficient foreign exchange market in The Gambia.