- Decision
- Lower
- Rate change
- 200 bps
- monetary policy rate
- 14%
The Monetary Policy Committee of the Central Bank of The Gambia cut the Monetary Policy Rate by 200 bp to 14 percent, judging that sustained disinflation alongside resilient output growth allows a less restrictive stance. After a 100 bp reduction in December 2025, the policy rate has fallen by a cumulative 300 bp since September. The required-reserve ratio is unchanged at 13 percent, the standing deposit rate stays at 5 percent, and the standing lending rate falls to 15 percent (MPR + 1 pp). Headline inflation eased to 6.4 percent in January 2026 from 6.6 percent in December and a 18.5 percent peak in September 2023; the central bank expects it to approach its medium-term target by end-2026. Real GDP is projected to grow 6.4 percent in 2025 and 6.2 percent in 2026, underpinned by investment, remittances and strong services activity, while money supply expanded 26.2 percent and private-sector credit 7.2 percent in 2025. Externally, the current-account deficit narrowed to 3.2 percent of GDP in 2025, the dalasi remained broadly stable, and reserves stood at USD 585.3 million, covering 4.5 months of imports. The committee noted supportive global conditions—IMF-projected world growth of 3.3 percent, lower energy prices and easing food costs—and reiterated its data-driven approach, pledging to act swiftly if the outlook shifts.
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.