By zainab.joaque@awokonewspaper.sl
Freetown, SIERRA LEONE – The Accountant General’s latest report reveals a notable shift in the depreciation of the Leone, indicating a decrease of 16.8 percent between January and December 2023, a significant improvement from the steep depreciation rate of 64.3 percent recorded in the same period in 2022.
In the unaudited 2023 Annual Public Accounts, it was highlighted that exchange rate pressures saw a marked moderation in the second half of 2023. This trend was attributed to recent policy interventions implemented by the Central Bank to address currency volatility.
These measures, including the removal of administrative barriers, selective lending in foreign exchange, and expanded acceptance of foreign currencies in certain transactions, were complemented by a stringent policy stance.
As a result, exchange rate depreciation was substantially reduced to 7.3 percent between July and December 2023, compared to a staggering 32.53 percent during the corresponding period in 2022.
Despite this positive development, the report noted a decline in the Gross International Reserves of the Bank of Sierra Leone (BSL), which decreased to $468.35 million by the end of December 2023 from nearly $600 million in January of the same year.
The reduction in reserves was primarily attributed to government efforts to support essential imports such as rice and fuel, as well as external debt servicing and the introduction of a new currency.
Addressing inflationary pressures, which persisted for much of 2023, the report highlighted signs of relief towards the end of the year. This was attributed to the tight monetary policy stance of the Bank of Sierra Leone, reinforced by fiscal consolidation efforts.
Headline inflation saw a notable decline, easing to 54.2 percent in November and further dropping to 52.2 percent in December 2023, following a peak of 54.6 percent in October. Factors contributing to this improvement included moderating food inflation, stability in the exchange rate since July 2023, and softer international commodity prices. ZIJ/8/4/2024