By zainab.joaque@awokonewspapersl.com
Freetown, SIERRA LEONE — Signs of stabilization are beginning to emerge in Sierra Leone’s foreign exchange (FX) market, thanks to deliberate monetary interventions and increased transparency by the Bank of Sierra Leone (BSL), according to the latest Monetary Policy Report covering Q4 2024.
The report paints a cautiously optimistic picture, as the central bank’s efforts appear to be stemming volatility and restoring market confidence, even as total FX market activity continues to experience contraction.
In Q4 2024, commercial banks acquired the largest portion of FX—35.69%—from non-governmental and international organizations. Notably, the agricultural sector (14.58%) and services (10.92%) emerged as significant contributors, underscoring the diversified nature of FX inflows. Remittances, traditionally a key lifeline, accounted for 10.54%—sourced both directly from remittance firms and via foreign exchange bureaus.
Mining and government projects contributed 7.56% and 4.27%, respectively, while FX bureaus themselves made up 7.52% of inflows. The range and diversity of sources reflect a broadening base of foreign currency supply, a positive indicator of underlying economic activity.
Despite the positive diversification, total FX traded fell to USD 288.26 million in Q4 2024, down 6.27% from the previous quarter and 13.28% year-on-year. While this decline might initially raise concern, it must be contextualized within broader economic adjustments and ongoing efforts to clean up inefficiencies in the FX system.
Crucially, the decline could be interpreted as short-term market correction, reflecting tightening liquidity conditions and improved oversight, rather than weakening fundamentals.
On the demand side, trade-related imports absorbed the lion’s share of FX—56.12%—indicating persistent import dependency. Oil marketing companies followed with 13%, while the service sector (10.05%) and rice importers (6.08%) remained active FX consumers.
A further 14.75% went to telecoms, fishing, logistics, personal payments, and construction—signaling modest but diversified economic activity across consumer and capital goods.
The report also highlighted a 3.92% drop in foreign currency account inflows during Q4. Foreign exchange bureaus and mining each contributed around 19%, followed closely by the service sector (17.18%) and NGOs/international organizations (9.91%).
This marginal decline, while notable, is not alarming. It aligns with seasonal patterns and reflects global FX dynamics, including reduced remittance flows in the post-holiday period.
What distinguishes this report is the central bank’s clear message: stabilization is underway, but vigilance is critical. The Bank attributes the relative calm in Q1 2025 to targeted reforms, consistent FX interventions, and a communication strategy that prioritizes investor confidence.
“The foreign exchange market is expected to remain relatively stable in 2025Q1,” the report states, pointing to policy consistency and transparency as key drivers of expectation management among both domestic players and foreign investors.
For businesses, importers, and investors, the central bank’s report offers more than data—it signals direction. While the FX market has not yet returned to pre-crisis vibrancy, the foundations for a more resilient and transparent system are being laid.
The next few quarters will be crucial. Sustaining this fragile stability will require continued macroeconomic discipline, bolstered reserves, and smart policy navigation amid global uncertainties.
As Sierra Leone eyes deeper integration with international markets and explores export diversification, a stable FX market is not just a monetary goal—it is a strategic imperative. ZIJ/9/6/2025
 market, thanks to deliberate monetary interventions and increased transparency by the Bank of Sierra Leone (BSL), according to the latest Monetary Policy Report covering Q4 2024.){kind=link}