Central Bank of The Gambia Cuts Benchmark Rate by 2 Percentage Points to 14%

By Seedy Jobe

The Central Bank of The Gambia on Thursday lowered its benchmark interest rate by 2 percentage points, to 14 percent, signaling a shift toward monetary easing as inflation pressures moderate and economic growth remains steady.

The decision, announced after the bank’s 97th meeting of its Monetary Policy Committee, reflects what officials described as sustained domestic resilience and a stable inflation outlook, even as global uncertainties persist. The committee met on Feb. 25 and 26 at the bank’s headquarters.

“The Monetary Policy Committee, after assessing domestic and global economic conditions and the near-term outlook, decided to cut the monetary policy rate by 200 basis points to 14 percent,” the governor, Buah Saidy, said at a news briefing attended by senior bank officials, commercial bank executives, and members of the news media.

In addition to reducing the policy rate, the committee maintained the required reserve ratio at 13 percent and kept the standing deposit facility rate at 5 percent. It lowered the standing lending facility rate to 15 percent. The next policy meeting is scheduled for May 20 and 21.

The rate cut follows extensive deliberations that included reviews of fiscal and monetary developments, research assessments, and stress tests of commercial banks and microfinance institutions.

Governor Saidy said the global economy had maintained momentum despite “significant headwinds” from trade disruptions and geopolitical tensions. The International Monetary Fund projects global growth of 3.3 percent in 2026, a 0.2 percentage point upward revision from its October 2025 estimate.

Growth in sub-Saharan Africa is forecast to strengthen from 4.4 percent in 2025 to 4.6 percent in 2026, supported by macroeconomic stabilization efforts, reform programs, and a recovery in domestic demand. Global inflation is expected to continue easing, driven by softer demand, lower energy prices, and improving supply conditions.

At home, the Gambian economy is projected to expand by 6.4 percent in 2025, moderating slightly to 6.2 percent in 2026, according to the central bank’s forecasts. The governor attributed the expansion to strong private and public investment, steady remittance inflows, and improved performance in services, construction, and agriculture.

External balances showed improvement. The current account deficit narrowed to $75.9 million, or 3.2 percent of gross domestic product, in 2025, from $103.9 million, or 4.4 percent of GDP, in 2024. The goods deficit also shrank, to $962.8 million, or 40.1 percent of GDP, from $1.03 billion, or 43.8 percent, a year earlier.

Gross international reserves stood at $585.3 million at the end of 2025, equivalent to 4.5 months of prospective imports of goods and services, bolstering confidence in the Dalasi and providing a buffer against external shocks.

Preliminary fiscal data indicated an improved budget position. The overall deficit, including grants, declined to 2.8 percent of G.D.P. in 2025, from 4.4 percent in 2024.

The banking sector, Mr. Saidy said, remains stable and well-capitalized. Industry assets rose to 128.6 billion dalasis, equivalent to 67 percent of GDP., up from 100.1 billion dalasis, or 52.6 percent of GDP., a year earlier — a sign, he said, of expanding balance sheets and growing depositor confidence.

The rate reduction marks one of the most significant easing steps in recent years, as policymakers balance the need to sustain growth with vigilance over inflation and external risks.