Sierra Leone’s national currency has continued to depreciate against the United States dollar in the market, due to what many could link to the current state of affairs of the country’s economy, where inflation has become the order of the day.
Presently, the Black-Market dollar dealers are selling $100 for NLe2,500 to interested buyers, while the bureau and commercial banks are buying $100 at Le2,251, and selling at a little higher rate, but the fact of the matter is, one can exchange a Leone for a dollar in the black markers, whilst it is difficult to get in the Commercial Banks.
On a year-on-year basis, the average exchange rate of the Leone against the US dollar depreciated in all the foreign exchange market segments, according to the Central Bank’s analysis on the Exchange Rates and Foreign Exchange Market Developments.
The exchange rates in the commercial banks, parallel market, official market and bureau, depreciated by 10.1%, 10.08%, 9.6%, and 9.4% averaging Le11,209.55 – US$1, Le11,662.08 – US$1, Le10,996.16 – US$1, and Le11,010.19 – US$1 in Q4-2021, relative to Le10,180.51 – US$1, Le10,594.17 – US$1, Le10,037.64 – US$1, and Le10,059.56 – US$1 respectively in Q4-2020.
On a quarterly basis, the average exchange rate of the Leone against the US dollar depreciated in the official market, commercial banks, parallel market, and bureau by 6.7%, 6.7%, 6.6%, and 6.2%, respectively.
The Nominal Effective Exchange Rate (NEER), which measures the relative strength of the Leone against the currencies of Sierra Leone’s trading partners, depreciated by 3.6% quarterly to an index of 299.90 in Q4-2021.
Bilaterally, the Leone depreciated against the Chinese RMB by 7.3%, US dollar by 6.0%, Swiss franc by 5.6%, British Pounds by 3.6% and Euro by 1.7%.
Similarly, the Real Effective Exchange Rate (REER), which measures the competitiveness of Sierra Leone’s traded goods, relative to those of its trading partners, depreciated slightly by 1.5% quarterly, to an index of 97.76 points in Q4-2021.
The depreciation was mainly on account of the increase (depreciation) in NEER, which outweighed the decrease in the ratio of foreign prices to domestic prices. ZIJ/3/10/2022
