By Adama Makasuba
Dr. Paul Mendy, second deputy governor of the Central Bank of Gambia has said that monetary policy tools control money supply or interest rate to ensure price stability and general trust in the currency.
Dr. Mendy was speaking at the West African Institute for Finance and Economic Management five days course on the monetary policy framework and analytical tools for monetary, aimed at introducing participants to the different types of monetary policy framework, underway at Paradise Suite Hotel.
“For instance, the monetary policy remedy to economic decline is to increase the money supply, thereby cutting interest rates. The objectives of monetary policy can also be the attachment of internal and external balance of payments.
“By the use of monetary policy tools, the monetary authority of a country can either control money supply or interest rate to ensure price stability and general trust in the currency,” he said.
He described maintaining stable prices on a stable basis as a crucial pre-condition for increasing economic welfare and the growth potential of the economy.
“Guided by the aforementioned principles, the monetary policy committee of the Central Bank of The Gambia undertook a review of the Gambian economy at its recent meeting in May 2022. The committee reviews developments and near-term economic outlooks in the international and domestic economy.
“Developments in the global space are weighing on the prospects for The Gambian economy. These include uncertainties, constrained global supply chains which pushed up commodity prices, especially food and energy, elevated global inflation with the rising prices of energy, food, and metal,” he added.
Representing WAIFEM director general, Dr. Emmanuel Owusu ASfriyie, director of research and macro-economic management department, said given the multi-dimensional challenges facing economies in the sub-region monetary policy “should focus on deploying the mix of appropriate instruments to deliver on price stability, exchange rate stability, financial stability, and economic growth.”