Again, the presidency forcefully reduce selling rate of the dollar

A similar directive from President Yahya Jammeh which forced the reduction of the dollar to a selling rate of D28 from D34 (the market price at the time) in October 2012, was withdrawn barely 15 days after it was imposed.(Photo credit: Wikipedia)

By Modou S. Joof

The Office of The Gambia’s President, Yahya Jammeh, on Tuesday forcefully reduced the selling rate of the United States Dollar from D38 – to between D30 and D33 for $1.

It also imposed a moratorium on all shipment of the US Dollar out of the country with possible exemption for essential importation, which must obtain prior clearance from the presidency.

Mr Jammeh’s office accuses “speculators and some unscrupulous businesses” of creating an artificial shortage of foreign exchange especially that of the United States dollar.

This, it argued, causes the dollar’s unprecedented appreciation against the Gambian Dalasi, hiking prices of basic commodities and causing economic hardship to the people of The Gambia.

A similar directive was passed on October 22 last year when the president’s office threatened that very drastic action will be taken against any individual or business found culpable of foreign currency hoarding and speculating – an operation no compromise on foreign currency hoarding it was dubbed.

That directive on the exchange rate and shipments of U.S. dollars led to some “disruptions” in the foreign exchange market and created “uncertainty” about The Gambia’s exchange rate policy, Mr. David Dunn said in December.

Obverse of 5 and 100 dalasi note (Photo credit: Wikipedia)

“For full confidence to return to the financial market of The Gambia, the Central Bank of The Gambia (CBG), which is responsible for exchange rate policy, must continues to implement this policy framework,” the International Monetary Fund (IMF)’s Chief of Mission to the country said.

The directive, which forced the reduction of the dollar to a selling rate of D28 from D34 (the market price at the time), was withdrawn barely 15 days after it was imposed.

At the end of a December 3-7 mission to assess the damage done by that directive on the exchange rate policy and operations of the foreign exchange market, the Breton Woods institution said the “CBG must assume its role”.

Currently, the national currency (the Dalasi) continues to loss value against major foreign currencies like the US Dollar, the British Pound and the Euro – a trend that has been going on for the past year.

“As recent as May 2013, it depreciated against the British Pound by 12.62 per cent, the US dollar by 11.87 per cent and the Euro by 12 per cent,” according to the economic think tank, the IMF.

Amid rising inflation, the Central Bank of The Gambia (CBG) on Friday suspended three foreign exchange bureaus – Ria, Money Express, and Wari. The suspension of the three money transfer operators (MTOs) began on June 21, 2013 – until further notice.