Africa-Press – Sierra-Leone. The Monetary Policy Committee (MPC) of the Bank of Sierra Leone (BSL), following its quarterly meeting on July 24, 2025, has announced a significant reduction in its key policy rates, effective July 29, 2025.
The move aims to sustain macroeconomic stability, address inflationary pressures, and stimulate private sector credit.
The Monetary Policy Rate (MPR) has been reduced by 2 percentage points to 21.75%. Concurrently, the Standing Lending Facility Rate (SLFR) has been lowered to 23.75%, and the Standing Deposit Facility Rate (SDFR) to 14.25%. These adjustments were approved by the BSL’s Board of Directors on July 28, 2025.
According to the MPC, the decision was premised on several positive developments:
Declining Inflation: Inflationary pressures have continued to ease, with headline inflation dropping to 7.10% in June 2025, down from 7.55% in May 2025. This follows a reported 13.8% in December 2024.
Falling Treasury Bill Rates: There has been a further reduction in the 364-day Treasury Bill rate, falling from 20.40% on June 12, 2025, to 15.77% on July 17, 2025, attributed to ongoing fiscal consolidation efforts by the government.
Improved Economic Activity: Real GDP growth is projected to increase to 5.5% in 2025, a rise from 4.4% in 2024. The BSL’s Composite Index of Economic Activity (CIEA) indicates a slight slowdown in economic activity in the second quarter of 2025.
Private Sector Credit Growth: A slight decrease in private sector credit growth was noted, from 3.72% of GDP in March 2025 to 3.69% of GDP in May 2025.
Stable Exchange Rate: The Leone/US Dollar exchange rate has remained relatively stable, supported by monetary and fiscal policy coordination, leading to improved market sentiment.
Despite these positive trends, the MPC acknowledged that global economic uncertainty remains a risk.
The MPC emphasized that the balance of risks to the inflation outlook has shifted downwards. Therefore, a more consistent monetary policy stance is being adopted to align with developments in the money market, stimulate private sector credit, and enhance price stability.
The committee reiterated its commitment to maintaining price stability and will continue to recommend adjustments to the monetary policy stance before the next MPC meeting, should market conditions warrant. The next MPC meeting is scheduled for September 25, 2025.
The statement was issued by Dr. Ibrahim L. Stevens, Governor of the Bank of Sierra Leone.
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