In a statement delivered by the Governor Buah Saidy, the committee also decided to maintain the required reserve at 13% and as well maintain the interest rate on the standing deposit facility at 3% and the standing lending facility at 1% point over the MPR 12%.
Responding to questions from our reporters, Governor Saidy explained that before the Covid-19 pandemic, the country’s economy was growing at 6%, which they wanted to accelerate by 8%.
“We observed that inflation has been decreasing significantly. In February it was 8.3% and it came down to 8.2%; accelerated to 11.7%. It’s mainly due to the developments of the international economy,” he said.
He continued that there is a global increase in food and fertiliser prices, saying most of the things “we eat and use are imported.” He affirmed that the Central Bank is aware of this and that’s why the monetary policy was loosened to support the economy.
To fight inflation, he revealed that what the Central Bank is reversing the monetary policy.
“We are tightening the monetary policy to withdraw the excess liquidity in our economy to combat inflation. We increased the monetary policy rate but left the reverse requirements and the standing lending facility unchanged. We are observing the increase in inflation and during our meeting, we assessed the situation and thought that increasing the policy rate will help.”
He revealed that the bank has a model built and will guide them in terms of policy actions and outcomes while confirming that the model indicated that by 2023, inflation will decline by 5% or below.
Within the sub-region, he reiterated that inflation declined only in Benin and Ivory Coast because of support for the growth economy.
Comparing The Gambia and some African countries, Governor Saidy stated that in Ghana, inflation moved from 13.9% in January to 23.6%; Nigeria increased from 15.6% in January to 16.3%; Senegal increased from 5.5% to 7%; and Burkina Faso from 7.2% to 15.1%.
He further promised that the MPC will continue to closely monitor the impact of these policy measures and development in the global and domestic economy and stands ready to act when necessary.
