GAMBIA’S CURRENCY TAKES DOWNWARD SLOPE

As at end-December 2011, the value of The Gambia’s currency, the Dalasi, depreciated against all major international currencies, Central Bank Governor Amadou Colley revealed on Tuesday at the quarterly press conference of the Bank’s Monetary Policy Committee (MPC).

Governor Colley

Governor Colley said the Dalasi weakened against the US Dollar by 7.7 per cent, the Pound Sterling 6.9 per cent, and the Euro 8.8 per cent. 

Consumer price inflation, which measures changes in the price level of consumer goods and services purchased by households, depreciated to 4.4 per cent in December 2011, lower than the 5.8 per cent in December 2010.

However, according to Governor Colley, average inflation has declined, albeit slightly, to 4.8 per cent from 5.0 per cent in December 2010. 

Dalasi notes

Inflation, he said, is expected to remain in single digit in 2012 predicated on prudent implementation and fiscal policies as well as the easing of the global food prices.

Data from the Gambia Bureau of Statistics indicate that the Gambian economy grew by 5.4 per cent in 2011, slightly lower than the 5.5 per cent and 6.7 per cent in 2010 and 2009 respectively. 

Provisional data indicate an improved government fiscal position in 2011.  The country’s revenue and grants increased from D5.0 billion in 2010 to D5.2 billion in 2011, equivalent to 16.1 per cent of Gross Domestic Product (GDP), which is the total monetary value of all goods and services produced domestically in the country over a specified period. 

Domestic revenue, comprising tax and non-tax revenue, also rose to D4.2 billion representing 6.9 per cent of GDP.

W/African Central Banks look at new currency control mechanism

Central Bank officials from the sub-region are charting out a new direction of maintaining qualitative banknotes and currency management that will ensure the durability and protection of national currencies from counterfeiters and other deficiencies. Held at the Paradise Suites Hotel in Kololi, the five-day workshop that commenced yesterday, brought together senior central bank officials from The Gambia, Nigeria, Ghana, Sierra Leone and other countries to study and dilate on the New Challenges in Currency Management, New Directions in Banknote Design, Security Features Against Counterfeiting, Forecasting the Demand for Banknotes, and Country Case Studies on Currency Management. Organised by  the West African Institute for Financial and Economic Management (WAIFEM), in collaboration with Dela Rue, under the theme: "Banknote and Currency Management and Forecasting in Central Banks", the workshop would not have been more appropriate given the fact that member countries' economies remain predominantly cash-based, reflecting the preference of economic agents, the weakness of the legal system to enforce contracts, and the level of development of payments in member countries. "Thus, this maiden workshop could not have come at a more auspicious time, given the problems of currency management in our countries and the urgent need to chart a new direction consistent with best practices, in order to engender greater efficiency and minimize the cost of printing and minting currency," WAIFEM Director-General Prof Akpan H. Ekpo, said in his opening remarks on the occasion. No central bank function is more visible than currency management, Prof Ekpo says, adding that a currency's integrity and efficient supply are unequivocal everyday indicators of a well-functioning central bank. "In the eyes of the people, this integral central bank function should be efficient, meet demand and also present minimal issues which may damage the reputation of the country. Of particular concern is the issue of counterfeiting, which is as old as money itself, and continues to present a potential danger to national economies and financial losses to consumers. "Worse of all, recent developments in photographic and computer technology, as well as printing devices, have made the production of counterfeit money relatively easy, thereby increasing the potential threat." Currency management is a critical aspect of central bank's functions, says Hon. Amadou Colley, Governor of the Central Bank of The Gambia, while delivering the keynote address on the occasion. "The integrity of the currency and efficient supply of banknotes are indicators of a well-functioning central bank, especially in preponderantly cash based economies such as ours," he said, "adding that issuing and destroying cash, maintaining note quality and guarding against counterfeit notes is a complex business and is increasingly costly." Some organizations have responded to this growing trend by outsourcing currency sorting, he also notes. The International Organization for Standardization (IOS) certification, he explains, ensures that minimum international quality standards are adhered to in the systems and procedures followed in an organization. "Here, quality implies doing right things the right way, first time and every time," he said. Touching on key elements in Banknote Design, Hon. Colley said: "For currency managers, note designs present a series of interlocking challenges. New designs must win public acceptance, incorporate requisite security features and meet durability and machine processing standards. Fitness standards for currency in circulation must be set and monitored whether currency sorting is carried out in-house or outsourced. "The proliferation of Automated Teller Machines (ATMs) has had a considerable impact and sharpened the focus for both commercial and central banks. The growing network of ATMs has also affected the composition shift from lower denomination notes to higher denomination notes. "The banks do not find it commercially viable to stock the machines with lower denomination notes because they run out sooner and increase both the capital cost and operating costs." The CBG Governor also dilated on the demand for banknotes, saying efficient and effective currency management commences with a strategic analysis of the currency life-cycle. However, he observed, strategic management of currency "is impossible" without accurate forecasts of the demand for banknotes. "The long lead time involved in banknote production makes it vital from cost and reputational point of view that central banks forecast the demand for banknotes as accurately as possible," he said, adding: "Indeed, the benefits of accurate forecasting are obvious. It encourages more efficient procurement and reduces stockholding costs. In other words, a disciplined, balanced approach to currency management reduces opportunity losses and thus enhances the smooth functioning of the banking system." Other speakers on the occasion included Mr Morf Ulrich of Orell Fussli Security Printing Limited and Mr Ehi E. Ekoyomon, MD/CE, Nigerian Security, Printing & Mining Plc. Source: The Point