By: News Desk
The Governor of Central Bank of The Gambia, Bauh Saidy has disclosed that The Gambia’s domestic debt stood at Thirty Four Billion, Six Hundred Million Dalasis (D34.6billion) as at December, 2020.
Governor Saidy made this revelation at a presser organised by the Monetary Policy Committee (MPC) of the Central Bank of The Gambia on Thursday 4th March, 2021, where he said the increased in the lending of commercial banks is due largely to the liberal market environment of the country.
“The total outstanding domestic debt stock as at end-December 2020 grew by 4.3 percent to D34.6 billion (32.4 percent of GDP) from D33.1 (36.2 percent of GDP) in the corresponding period in 2019. Stocks in Treasury Bills and Sukuk Al Salaam slowed to 5.8 percent in 2020 compared to 11.5 percent in 2019” CBG Governor disclosed.
According to him, the banking sector remains fundamentally sound with high levels of capital and liquidity, revealing that on annualized basis total assets of banking industry rose by 3.5 percent equal to D58.8 billion in December, 2020.
“All the banks are adequately capitalized with liquidity ratio of the industry pegged at 94.4 percent in December, 2020, 2.8 percent higher than the 2019 ratio and well above the 30 percent statutory requirement. Non-performing loans ratio increased to 6.8 percent in December 2020, from 4.6 percent a year ago,” Governor Saidy stated
Dilating on the foreign exchange market of the country, Central Bank Chief said exchange rates came under pressure due to supply constraints associated with Covid-19 pandemic and slowdown of remittances in the last quarter of 2020.
He observed that the pressure on the exchange rate has resulted to the weakened of the dalasi against the three top major international currencies, arguing that year-on-year the dalasi depreciated against the Euro, Pound Sterling and US Dollar by 7.3 percent, 1.5 percent and 1.1 percent respectively.
According to him, foreign exchange market recorded an excess demand of $5.72 million of foreign currency in the fourth quarter of 2020 indicative of a pick-up in economic activity during the period as fears of the Covid-19 was allayed by the production and roll out of the vaccine. He added that the volume of transactions in the foreign exchange market has declined to US$2.17 billion as at end-December 2020.
Governor Saidy disclosed that the Monetary Policy Committee has predicted a 6.0 percent projected growth for the Gambian economy in 2021, noting that the prediction is anchored on the resumption of normal economic activities with a rolling out of a vaccine on the horizon.
He said the MPC has taken key decisions including maintaining the Policy rate to laqqĺ10percent; maintain the required reserves at 13 percent; and maintain the interest rate on the standing deposit facility at 2.5 percent and the standing lending facility at 11.0 percent (MPR plus 1 percent).
While responding to questions asked by Journalists, Governor Saidy disclosed that the increase in lending rates of the commercial banks can largely be blamed on the liberal market nature of the country, disclosing that the Bankers Bank has set the lending rates for commercial banks to not exceed 15 percent and as such encourage commercial banks to limit themselves to this directive.
He adduced that Central Bank cannot force banks to comply with the 15 percent lending rate due largely to lack of policies to enforce this on commercial banks.
