The Central Bank of The Gambia has kept its Monetary Policy Rate at 14 percent, opting for a cautious policy stance as rising domestic debt, persistent transport costs and external uncertainties continue to pose risks to the country’s inflation outlook.
The decision was announced Thursday following the two-day meeting of the Central Bank’s Monetary Policy Committee (MPC), which assessed developments in the global and domestic economy.
Although headline inflation eased to 7.0 percent in July 2026, down from 7.6 percent in June and 7.5 percent in May, the rate remains above the Central Bank’s implicit target of 5 percent.
The Committee said the moderation was largely driven by easing food-price pressures, but warned that non-food inflation remained elevated, particularly transport costs.
Transport inflation accelerated to 16.5 percent in July, up from 14.5 percent in June, while non-food inflation rose to 8.9 percent from 8.7 percent.
The Central Bank said these developments, together with the possibility of higher energy and transport costs feeding into other prices, meant inflationary risks remained tilted to the upside.
“The Committee therefore assessed that inflationary risks remain tilted to the upside, particularly the potential second-round effects from higher transport and energy prices,” the MPC said.
The decision to maintain the policy rate also comes against the backdrop of stronger economic activity. The CBG has revised its 2026 real GDP growth forecast upward by 0.1 percentage point to 5.8 percent, supported by continued expansion in services, tourism and construction, as well as public and private investment and remittance inflows.
The economy grew by a provisional 5.7 percent in 2025, according to the Gambia Bureau of Statistics.
However, the external position remains a concern. The current account deficit widened to US$34.6 million, equivalent to 1.3 percent of GDP, in the second quarter of 2026, compared with US$29.7 million in the first quarter and US$23.7 million in the same quarter of 2025.
The goods account deficit narrowed during the quarter, with exports increasing by 21.9 percent to US$171 million while imports fell by 2.6 percent to US$413.5 million. Despite the improvement, the Central Bank noted that the goods deficit remained slightly wider than a year earlier, reflecting the country’s continued dependence on imports.
Foreign exchange market activity strengthened during the quarter, supported by increased remittance inflows and other foreign currency receipts. Private remittances reached US$265.5 million, compared with US$219 million in the corresponding period of 2025.
The Dalasi remained broadly stable, although it depreciated by 0.5 percent against the US dollar, 0.3 percent against the euro, 1.2 percent against the British pound and 0.1 percent against the CFA franc between March and June.
The country’s international reserves stood at US$563.9 million at the end of July, equivalent to 4.3 months of prospective imports.
Meanwhile, government’s fiscal position improved, with the overall deficit including grants narrowing to D3.8 billion, or 1.7 percent of GDP, in the first half of 2026, from D6.1 billion, or 3.1 percent of GDP, a year earlier.
But government domestic debt continued to rise, reaching D55.43 billion at the end of June, compared with D51.99 billion at the end of 2025. The Central Bank said the increase was driven by higher issuance of government securities.
More than half of the domestic debt portfolio 56.2 percent was concentrated in short-term instruments, up from 53.8 percent at the end of 2025, pointing to continued refinancing and rollover risks.
The banking sector, meanwhile, remained resilient. Capital adequacy stood at 25.5 percent, well above the 10 percent regulatory minimum, while liquidity reached 80 percent against a regulatory requirement of 30 percent. Non-performing loans also improved to 7.9 percent.
Despite these positive indicators, the MPC maintained the required reserve ratio at 13 percent, the standing deposit facility at 5 percent and the standing lending facility at 15 percent.
The Committee said it would continue monitoring domestic and external developments and remain prepared to act if conditions require a change in policy.
The next MPC meeting is scheduled for November 25–26, 2026.
