{"id":77245,"date":"2025-04-16T07:48:43","date_gmt":"2025-04-16T07:48:43","guid":{"rendered":"https:\/\/www.africa-press.net\/gambia\/uncategorized\/former-central-bank-governor-warns-high-inflation-undermines-economic-growth"},"modified":"2025-04-16T07:48:43","modified_gmt":"2025-04-16T07:48:43","slug":"former-central-bank-governor-warns-high-inflation-undermines-economic-growth","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/gambia\/all-news\/former-central-bank-governor-warns-high-inflation-undermines-economic-growth","title":{"rendered":"Former Central Bank Governor Warns High Inflation Undermines Economic Growth"},"content":{"rendered":"<p><span style=\"color: #ff6600\"><strong>Africa-Press &#8211; Gambia. <\/strong><\/span><b>Bakary Jammeh, former Governor of the Central Bank of The Gambia, has emphasized that high inflation poses a serious threat to economic growth, undermining investment and creating uncertainty.<\/b><\/p>\n<p>Speaking in an interview with Peter Gomez on Coffee Time, Jammeh stated, \u201cInflation is always a disease. High inflation undermines economic growth. A rate of 5% is manageable, but high inflation creates uncertainty, undermines investment, and in that case, it can also undermine the economy.\u201d<\/p>\n<p>Reflecting on his tenure, Jammeh recalled that inflation stood at over 9% when he assumed office but was brought down to 5% under his leadership.<\/p>\n<p>\u201cInflation was above 9%, So we brought it down to 5%. COVID came. It did not affect inflation. When I was at the bank, we weathered the storm. The COVID issue was almost over because we acted quickly. When people were doing the first dose, that was the second dose for the Central Bank of the Gambia. When I was leaving the bank, our monetary policy rate was 10%,\u201d he said.<\/p>\n<p>Jammeh explained that upon taking office, the monetary policy rate was around 20%, but as inflation targets were achieved, the rate was halved.<\/p>\n<p>\u201cWhen I came as governor, the monetary policy rate was about 20%. But you know, when we achieve the inflation target, we reduce the interest rate up to 10%. The objective of the central bank should be clear, limited, and prioritized,\u201d he stressed.<\/p>\n<p>He cited the Central Bank Act, which outlines the institution\u2019s primary mandate: maintaining price stability. Stating, \u201cSo if there is a crisis situation, your focus would be to maintain price stability in the country. In fact, this is what central banks are able to do best. You know, focus on inflation; ensure that inflation is low; you achieve price stability,\u201d he said.<\/p>\n<p>Asked what enabled the Bank to reduce the policy rate, Jammeh attributed it to disciplined financial management. \u201cOne is discipline in the management of the bank. It is very important. If a central bank, if you don\u2019t control the money supply very well, you are going to run into a price stability problem,\u201d he said.<\/p>\n<p>He added \u201cIt is well documented all over. And this is not something that economists are debating at this point. That\u2019s tested and too much money in the economy causes inflation. This is something which has been documented over and over, tested and proven over.\u201d He said.<\/p>\n<p>Jammeh pointed to historical examples, such as the 1930s U.S. Federal Reserve policy of lowering reserve requirements and injecting money into the economy, which led to inflation and financial instability.<\/p>\n<p>\u201cIn the 1930s, the Federal Reserve reduced reserve requirements and poured money into the economy, It caused inflation, But after some time, they did a policy reversal to implement contractionary monetary policy. That also affected the credit markets. So it caused a lot of financial problems in the country,\u201d<\/p>\n<p>During the COVID-19 pandemic, he explained, the Central Bank implemented proactive policy measures, including lowering the reserve requirement and increasing the money supply\u2014steps made possible by stable inflation and exchange rates at the time.<\/p>\n<p>\u201cSo it is well documented that too much money in the economy causes inflation. Now, during COVID, we took several policy measures, one was that we reduced the reserve requirement because the room was there,\u201d He Said.<\/p>\n<p>He continued: \u201cInflation was 5%. Our exchange rate was stable, 50, 51%, very stable. So there was a massive policy room for us to maneuver. Interest rate, we dropped it to 10%. So, not only that, we increased the money supply because inflation was low, at that time, this American Rice bag of rice was 1,200 or so. And now it\u2019s 2,250 or somewhere around that. So this was one aspect. Because stability was achieved, there was a very big policy room,\u201d<\/p>\n<p>He noted that during his tenure, they took steps to expand policies aimed at mitigating the impact of COVID-19.<\/p>\n<p>\u201cSo we were able to expand the policy to ensure that within some period, the impact of corona will also be mitigated. The other thing we did was we are making a lot of profit as a central bank. At the time, in 2019 Before COVID, we made a profit of over D500 million. And that 2020 by September, at the time I was leaving the bank, I left a profit of over D300 million, even during COVID,\u201dhe stated.<\/p>\n<p>He explained that they had a significant Dalasi reserve, which proved crucial when COVID-19 hit. At the time, the government had legacy debts owed to the Central Bank and was required to pay interest on those debts. Instead of letting the government handle the payments directly, they used the Dalasi reserves to pay on the government\u2019s behalf.<\/p>\n<p>\u201cSo we\u2019ve freed resources in the budget. I think if I can remember close to D800 million. Money that they should have spent, pays interest on principle. We paid on their behalf. And then the other thing we did was the IMF rapid credit facility. You know, the IMF lends to central banks. So they lend us. We give the money to the government. We transferred about D1.3 billion for the government to have more resources to help our people,\u201d He explained.<\/p>\n<p><strong>For More News And Analysis About <span style=\"color: #ff6600\">Gambia<\/span> Follow <span style=\"color: #ff6600\">Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Africa-Press &#8211; Gambia. Bakary Jammeh, former Governor of the Central Bank of The Gambia, has emphasized that high inflation poses a serious threat to economic growth, undermining investment and creating uncertainty. Speaking in an interview with Peter Gomez on Coffee Time, Jammeh stated, \u201cInflation is always a disease. High inflation undermines economic growth. A rate [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":77244,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7],"tags":[260],"class_list":["post-77245","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","tag-gambia"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Former Central Bank Governor Warns High Inflation Undermines Economic Growth - Gambia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/gambia\/uncategorized\/former-central-bank-governor-warns-high-inflation-undermines-economic-growth\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Former Central Bank Governor Warns High Inflation Undermines Economic Growth\" \/>\n<meta property=\"og:description\" content=\"Africa-Press &#8211; Gambia. Bakary Jammeh, former Governor of the Central Bank of The Gambia, has emphasized that high inflation poses a serious threat to economic growth, undermining investment and creating uncertainty. Speaking in an interview with Peter Gomez on Coffee Time, Jammeh stated, \u201cInflation is always a disease. High inflation undermines economic growth. 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Bakary Jammeh, former Governor of the Central Bank of The Gambia, has emphasized that high inflation poses a serious threat to economic growth, undermining investment and creating uncertainty. Speaking in an interview with Peter Gomez on Coffee Time, Jammeh stated, \u201cInflation is always a disease. High inflation undermines economic growth. 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