Freetown, 7th April 2026 — The Bank of Sierra Leone has kept its benchmark Monetary Policy Rate (MPR) unchanged at 16.75 percent, following a meeting of the Monetary Policy Committee (MPC) chaired by Governor Dr. Ibrahim L. Stevens on March 26, 2026. The decision, approved by the Bank’s Board of Directors on March 27, comes as inflationary pressures mount at home and global economic conditions grow increasingly fragile.
Domestic headline inflation, which had eased to 4.35 percent in December 2025, rose sharply to 6.38 percent in January 2026 and further to 8.05 percent in February 2026. The MPC attributed this acceleration to recent fuel price adjustments, new tax measures under the 2026 Finance Act, and the impact of the United States–Israel–Iran war, which has triggered a global energy shock.
Despite these pressures, Sierra Leone’s growth outlook remains positive. Real GDP is projected to expand by 4.5 percent in 2026, supported by strong agricultural performance, continued mining activity, and growth in services. The Composite Index of Economic Activities signals sustained improvement, while fiscal consolidation has reduced borrowing needs, reflected in lower yields on 364‑day Treasury securities.
External sector conditions also showed improvement in late 2025, with the trade deficit narrowing and gross international reserves rising to 2.1 months of imports. The exchange rate has remained broadly stable. However, the MPC warned that rising global oil prices could erode these gains by increasing import costs and pressuring the balance of payments.
Credit to the private sector grew by 48.99 percent in the fourth quarter of 2025, driven mainly by business services, commerce, finance, and construction. While this expansion supports economic activity, the Committee noted that lending remains concentrated in a few sectors, limiting broader impact. It urged diversification of credit to underserved areas.
The banking system remains stable, with non‑performing loans below the regulatory threshold of 10 percent. However, banks’ preference for government securities continues to constrain private sector lending.
In its conclusion, the MPC emphasized that current inflationary pressures are largely supply‑driven and cautioned against allowing them to trigger second‑round effects. Maintaining the MPR at 16.75 percent, alongside the Standing Lending Facility Rate at 20.75 percent and the Standing Deposit Facility Rate at 11.25 percent, was deemed the most prudent course to anchor inflation expectations, preserve market confidence, and safeguard macroeconomic stability.
The Committee pledged vigilance, noting it stands ready to adjust policy should external conditions worsen or domestic inflation expectations de‑anchor. The next MPC meeting is scheduled for June 16, 2026.
