By Joseph Momoh, D.S
FREETOWN — The Bank of Sierra Leone (BSL) has raised its Monetary Policy Rate (MPR) to 17.25 percent in a fresh move to curb rising inflation.
The increase of 0.25 percentage points was decided by the Monetary Policy Committee (MPC) at its meeting on September 24, 2026, and approved by the BSL Board on September 28. It took effect on September 29.
According to the Bank, headline inflation rose from 10.24 percent in March to 14.77 percent in June, 14.89 percent in July and 15.66 percent in August 2026. The MPC attributed the pressures to tax policy measures, higher domestic food prices linked to climate-related supply constraints and elevated energy prices driven by global uncertainties.
The Committee said the inflation outlook remains exposed to upside risks, making further tightening necessary to contain second-round effects, anchor expectations and preserve macroeconomic stability.
Alongside the MPR hike, the Bank adjusted the Standing Lending Facility Rate to 21.25 percent and the Standing Deposit Facility Rate to 11.75 percent.
Meanwhile, the banking sector remained broadly stable, resilient and profitable, supported by adequate capital buffers and compliance with most prudential requirements. However, the Non-Performing Loan ratio rose to 10.2 percent, exceeding the regulatory ceiling of 10 percent, prompting the MPC to call for stronger credit management and internal controls.
On growth, the BSL projects economic expansion to moderate to 4.0 percent in 2026 from 4.8 percent in 2025, due to higher energy costs and global supply disruptions. It noted that growth could recover gradually through the Feed Salone Programme and other growth-enhancing initiatives.
The Bank also flagged concerns over geopolitical tensions in the Middle East and their potential impact on energy prices, supply chains and domestic activity.
On the external sector, the trade deficit widened in the second quarter of 2026 as exports fell while imports rose. Gross international reserves grew moderately, but import cover declined from 2.1 months in the first quarter to 1.8 months in the second. The foreign exchange market, however, remained broadly stable with low volatility.
The BSL reported that commercial bank lending to the private sector grew by 52.2 percent, above the 39.40 percent target under the IMF Extended Credit Facility, and stressed the need for more lending to productive sectors to support investment and jobs.
The Bank said it will continue to monitor developments and stands ready to take further measures if inflationary pressures broaden.
The next MPC meeting is scheduled for December 17, 2026.
For more information contact Daily Scope Newspaper at dailyscopemedia@gmail.com
