Gambia lifts restriction on forex rate

Gambian government has lifted restriction imposed on foreign currency exchange rate, State House said Friday.

It said the removal follows the stabilization of the exchange rate and the resultant positive impact on prices of goods and services.

"The government wishes to reiterate its commitment to the free market system and will continue to promote and encourage honest private sector participation and contribution of all sectors of the economy," State House said in a statement.

The restriction, which was imposed in May 2015, is lifted with immediate effect, said the statement.

The government cautioned actors in the economy to act responsibly and avoid speculation in the foreign exchange market, saying this will consolidate the positive gains registered in the economy in the past months.

"The government will not hesitate to use the full force of the law to deter individuals motivated by greed and selfishness from undermining the economy by engaging in unhealthy business practices such as hoarding of foreign currency and speculation," said the statement.

The government said its earlier decision to intervene in the foreign currency market was meant to correct "certain distortions and market failures" that resulted in the continuous depreciation of the value of the dalasi against foreign currencies.

At the time when the restriction was imposed, the government ordered that a U.S. dollar should not be exchanged for more than 40 Dalasi while the true market rate was between 53 to 55 Dalasi.

Since 2014, the Dalasi has continued to steadily lose value against all the major international currencies. Experts said the depreciation was partly the result of reduced foreign exchange receipts, coupled with strong demand owing in part to the high level of liquidity in the economy. Endite