The Minister of Finance Jacob Jusu Saffa has said that the exchange rate fluctuation undermines everything despite all the gains in fiscal reforms. “Even the revenue gains from the oil price liberalization are undermined by the exchange rate.” He went further to say that, worse even is the country’s import credit as the depreciation of the exchange rate also affects it. “For the outsider out there the only measure for economic performance is the exchange rate. So what can we do? Can we do currency swapping as it is being discussed in other African countries” he asked. Speaking at an economic forum, the minister was responding to the question of how can they ensure that the banks comply with existing prudential requirements, strengthening the foreign exchange rate and interbank exchange rate market system. The primary issue regarding the exchange rate that was highlighted is that people walk into the bank and withdraw foreign exchange and change on the street for transactions they are doing locally.
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The Minister was asked how they create a preventive measure for that. The Minister started by saying that, there is need to understand the reason for the increase demand of the dollar. Stating that people are moving round with huge amount of dollar feeling that they will be called by the Commission of inquiry and those who he says were in business with these “old political operatives” convert their Leones into dollars. “Can we think about rebasing the currency and bringing it down to two digit” is it possible” what can we gain from that” he quizzed. In addition, this he says calls for the ‘trade-ability’ of our currency. Exchange rate problems he added have been very critical for African countries. With the CFA, inflation has been less than 2%, but the British West African countries have all gone through the exchange rate crisis, “so the question is, if Senegal is keeping the rate at less than 3%, is there something we can learn from? Instead of wasting our time can we join them, what does it take to join them? Are we afraid of other English speaking countries” he probed further. This he says brings in the issue of the common currency and that if Sierra Leone can join them and get the exchange rate stabilised “it will be fine.”
By Zainab Iyamide Joaque
Monday June 17, 2019.
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