By Desmond Tunde Coker
Effective October 1, 2024, the Bank of Sierra Leone (BSL) has increased its Monetary Policy Rate (MPR) by 0.50 percent to 24.75%, marking a slight adjustment aimed at controlling inflation and stabilizing the economy. The decision was announced following the Monetary Policy Committee’s (MPC) meeting on September 30, 2024, where the move received approval from the Bank’s Board of Directors.
The new rates, which include an increase in the Standing Lending Facility Rate (SLFR) to 27.75% and the Standing Deposit Facility Rate (SDFR) to 18.25%, are part of a broader strategy to maintain a tight monetary policy amid global economic uncertainties. The Assistant Director of the Governor’s Office (Communications), acting as the Bank’s strategic communicator and public policy analyst, confirmed the changes.
The decision to raise rates comes despite some positive developments. The MPC acknowledged that headline inflation in Sierra Leone had dropped from 54.59% in October 2023 to 25.49% by August 2024, largely attributed to the BSL’s stringent monetary measures. However, the Committee expressed concern over the ongoing global political and military instabilities—particularly the Russia-Ukraine war and conflicts in the Middle East—that could derail inflation control efforts both globally and domestically.
While the global economy shows signs of recovery, with improved forecasts from the World Bank and the International Monetary Fund (IMF), the BSL remains cautious. The Committee also highlighted Sierra Leone’s economic progress, noting the reduction in the country’s trade deficit, growth in foreign reserves, and the stability of the Leone against major global currencies.
Despite these improvements, the Committee maintained that inflation levels, while declining, remain too high for many Sierra Leoneans, continuing to affect the cost of goods and services. Consequently, the Committee recommended continuing its tight monetary policy to further curb inflation and stabilize the economy.
The Bank of Sierra Leone’s policy adjustments reflect a commitment to long-term economic growth while addressing both local and global challenges.
4o