The new Governor of the Bank of Sierra Leone, Dr Samura Kamara, has said the dollar boys play a useful role as they assist as an alternative.
The Bank Governor was responding to questions from the chairman of the Appointments and Public Service Committee, Hon Edward Turay of the APC, when he faced the committee on Monday for an interview.
When asked about the effects of the dollar boys on the economy, Dr Kamara responded that, “the dollar boys have a role but what is important here is what we call the parallel market premium. The difference between the value of the dollar that is one dollar in the bank vs. the value of the dollar when you go to the dollar boys, and if that premium becomes very very narrow, then you have a very useful role because the dollar boys will assist as an alternative.”
He mentioned that even though there were the good sides of the dollar boys there were also the bad sides.
“There is what is called dollarisation in the economy this is where you allow another currency that is not legal as the Leones surpass functional role of the currency in statistical economic transaction,” he explained.
The Bank Governor also stated that, “because there is a high level of dollarisation in Sierra Leone, a lot of people prefer to invoice in dollar which has its pros and cons.”
The Governor went on to explain that if there was what was called round tripping economy where financial institutions got foreign exchange cheaply from the central monetary authorities, and they gave the monies to the dollar boys to change at a higher Leones value, then it became bad for the economy.
He said, “that is not feasible at the moment because the government provides more foreign exchange in the economy as the central bank auctions every week, at least to facilitate imports.”
He said the country was lucky that “we have a high rate of repatriation, what we call invincible remittances where relatives from overseas who send monies to their people. This has helped a lot and has increased the amount of dollar in the economy.”