- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 17%
The Monetary Policy Committee of the Central Bank of The Gambia on 27 February 2025 left the Monetary Policy Rate unchanged at 17 %, judging that a continued tight stance is needed to sustain the ongoing but gradual decline in inflation while safeguarding stability amid external uncertainties. The committee also kept the required-reserve ratio at 13 %, the standing deposit facility rate at 4 %, and the standing lending facility rate at 18 % (MPR + 100 bp), with reserve money remaining the operating target after its growth slowed to 5.6 % in 2024. Headline inflation held at 10.2 % year on year in January after peaking late in 2024; food inflation eased to 12.7 %, non-food quickened to 7.3 %, and core inflation edged up to 4.6 %. Staff project headline inflation to dip into single digits by mid-2025 and move toward the implicit 5 % goal by 2026, while GDP growth is seen near 6 % this year and next following a 5.7 % estimate for 2024 and a 7.2 % expansion in the first three quarters of that year. International reserves stood at USD 515 mn in January, covering 4.6 months of prospective imports, and the dalasi was broadly stable, depreciating 2.3 % against the USD between September and December 2024 amid robust remittance inflows. The committee highlighted volatile global commodity prices, persistent but easing global inflation and potential shifts in advanced-economy rates as key external risks, and pledged to continue closely monitoring conditions ahead of its next meeting in May.
Rate evolution
Over the period, the Central Bank of The Gambia lowered the Monetary Policy Rate by 300 basis points from 17 percent to 14 percent, moving from an extended hold to two cuts and then two consecutive holds. The initial 17 percent stance reflected easing but still above-target inflation, persistent core pressures, solid domestic growth, and high uncertainty from trade fragmentation, commodity volatility, climate-related shocks and geopolitical tensions, with risks to inflation judged tilted to the upside. As headline, food and core inflation moderated and imported inflation pressures eased on subdued global commodity prices, while the dalasi stayed broadly stable and reserves, remittances and tourism inflows improved, the MPC cut in December 2025 and again in February 2026 to support lending, investment and growth while keeping price stability and inflation expectations anchored.
The Committee held the policy rate at 14 percent in May 2026 after Middle East-related energy and transport shocks lifted headline, food, non-food and core inflation, the growth forecast was revised down, and geopolitical spillovers and election-related uncertainty clouded the outlook. It maintained the rate in August as headline and underlying inflation moderated but remained elevated, non-food inflation rose on persistent transport costs, domestic growth strengthened and external uncertainty persisted, leaving inflation risks tilted to the upside and warranting a cautious stance.