The Monetary Policy Committee (MPC) of the Central Bank of The Gambia (CBG) convened on August 19 and 20, 2026, to assess current economic conditions and deliberate on the appropriate monetary policy stance. Following its deliberations, the committee announced its decision to maintain the Monetary Policy Rate (MPR) at 14 percent. This action reflects the CBG's ongoing strategy amid prevailing economic indicators in The Gambia, aiming to balance economic growth with price stability. The committee's decision was a key outcome of its thorough review of both domestic and international economic developments.
Domestic Economic Landscape
Real Gross Domestic Product (GDP) in The Gambia expanded by 5.7 percent in 2025, according to data from the Gambia Bureau of Statistics (GBoS). This growth performance provides a foundation for future economic activity. The Central Bank of The Gambia projects further real GDP growth, anticipating a 5.8 percent increase in 2026, signaling a positive outlook for the nation's economic expansion. These projections are key for guiding policy decisions and understanding the trajectory of the Gambian economy.
However, the nation's current account deficit widened to US$34.6 million, representing 1.3 percent of GDP, during the second quarter of 2026. This widening indicates that the country's imports of goods, services, and income exceeded its exports and transfers during this period. Despite the widening current account deficit, the goods account deficit showed improvement, narrowing to US$242.5 million, or 8.8 percent of GDP, in the second quarter of 2026. This narrowing was influenced by an increase in total exports, which rose by 21.9 percent to reach US$171.0 million during the same period. The growth in exports notes a positive development in the country's trade balance. Concurrently, imports moderated, decreasing by 2.6 percent to US$413.5 million in the second quarter of 2026, further contributing to the improved goods account balance.
The foreign exchange market saw increased activity, with aggregate foreign currency purchases and sales growing to US$773.7 million in the second quarter of 2026. This increased volume suggests dynamic interactions within the market. Private remittance inflows contributed significantly to foreign currency receipts, totaling US$265.5 million during the second quarter of 2026, showing the importance of diaspora contributions to the national economy. Despite these inflows, the Dalasi experienced a slight depreciation against the US Dollar, declining by 0.5 percent between the end of March and the end of June 2026. This modest depreciation reflects market dynamics and the relative strength of international currencies.
As of end-July 2026, gross official reserves stood at US$563.9 million. This level of reserves was equivalent to 4.3 months of prospective imports of goods and services at that time, providing a comfortable buffer for external payments and economic stability. On the fiscal front, the overall fiscal deficit, inclusive of grants, narrowed to D3.8 billion, accounting for 1.7 percent of GDP, in the first half of 2026. This narrowing deficit indicates an improvement in government financial management and a move towards greater fiscal sustainability.
Inflationary Pressures and Trends
Headline inflation in The Gambia registered a decline, reaching 7.0 percent in July 2026. This overall trend was observed alongside a decrease in food inflation, which eased to 5.8 percent during the same month. The moderation in food prices is a positive development for household purchasing power, given that food constitutes a significant portion of consumer spending. In contrast, non-food inflation experienced an increase, rising to 8.9 percent in July 2026, indicating that price pressures in other sectors of the economy are still prevalent.
Within the non-food category, transport inflation notably accelerated, reaching 16.5 percent in July 2026. This significant rise in transport costs can have ripple effects across the economy, impacting both businesses and consumers. Further analysis of price stability indicators showed that Core 1 inflation, which typically excludes volatile items like food and energy, declined to 6.9 percent in July 2026. Similarly, Core 2 inflation, another measure of underlying price trends that often includes a broader range of non-food items, also eased, settling at 7.8 percent in July 2026. The decline in both core inflation measures suggests that underlying inflationary pressures might be moderating, despite the increase in the broader non-food category.
Amid these inflationary trends, financial transaction data indicated an increase in economic activity through digital channels. Cash-in transactions, representing money deposited into digital accounts or mobile wallets, increased by 4.4 percent to D28.2 billion between the first and second quarters of 2026. Concurrently, cash-out transactions, which involve withdrawing money from these digital platforms, rose by 5.3 percent, totaling D32.1 billion, between the first and second quarters of 2026. These figures highlight the growing adoption and utilization of digital financial services in The Gambia, reflecting a shift towards a more digitized economy.
Global and Regional Economic Context
The International Monetary Fund (IMF) forecasts global growth at 3.0 percent in 2026, anticipating a strengthening to 3.4 percent in 2027. This global outlook provides a backdrop for The Gambia's economic projections. Advanced economies are projected to grow by 1.7 percent in 2026, indicating a steady but moderate pace of expansion in developed markets. Emerging market and developing economies are expected to expand by 3.8 percent in 2026, with growth rising to 4.5 percent in 2027, suggesting a more strong growth trajectory for these economies.
Within this global outlook, growth in Sub-Saharan Africa is projected at 4.3 percent in 2026, before increasing to 4.5 percent in 2027. This regional forecast is particularly relevant for The Gambia, as regional economic performance often influences domestic conditions. The IMF also projects headline inflation globally at 4.7 percent in 2026, an upward revision of 0.3 percent from its April forecast. This upward revision shows persistent global inflationary pressures, which can impact import costs and domestic price levels.
Commodity markets continue to influence the economic landscape. Energy prices remain about 25 percent above pre-war levels, contributing to elevated production and transportation costs globally. The average petroleum spot price is projected at US$89.27 per barrel in 2026, indicating sustained high energy costs. Additionally, the FAO Food Price Index registered an increase of 0.6 percent in July 2026, reflecting continued upward pressure on international food prices, which can affect The Gambia's food import bill and domestic food inflation.
Financial Sector Stability and Outlook
The Gambia's financial sector saw the government’s domestic debt stock increase to D55.43 billion, representing 24.4 percent of GDP, at the end of June 2026. This level of domestic debt requires careful monitoring to ensure fiscal sustainability. Data from the Central Bank of The Gambia indicated mixed trends in Treasury bill yields during the same period. The 91-day Treasury bill yield declined to 4.0 percent in June 2026, suggesting increased short-term liquidity or investor confidence in shorter-term government securities. In contrast, the 182-day Treasury bill yield increased to 7.1 percent, and the 364-day Treasury bill yield also rose, reaching 14.8 percent in June 2026. These rising longer-term yields reflect market expectations for future interest rates and the cost of government borrowing over extended periods.
The weighted average interbank rate, a key indicator of liquidity in the banking system, increased to 6.8 percent in the first half of 2026. This rise suggests tighter liquidity conditions in the interbank market. Annual money supply growth moderated to 11.4 percent in June 2026, indicating a more controlled expansion of the total money in circulation. Despite this moderation, credit to the private sector experienced significant expansion, increasing by 41.3 percent year-on-year. This strong growth in private sector credit signals increased lending by financial institutions, supporting economic activity and investment.
The financial industry's total assets grew to D131.7 billion, equivalent to 68.5 percent of GDP, at the end of June 2026, showcasing the expanding footprint of the financial sector. Total customer deposits also increased, reaching D86.6 billion, or 45.0 percent of GDP, by the end of June 2026, reflecting public trust and savings within the banking system. Indicators of financial health showed improvement, with the industry’s capital adequacy ratio increasing to 25.5 percent in June 2026, well above regulatory requirements and indicating strong capital buffers. The liquidity ratio also saw an increase, reaching 80.0 percent during the same month, demonstrating ample liquidity within the banking system to meet short-term obligations. The non-performing loan ratio improved to 7.9 percent in June 2026, signaling better asset quality within the banking system and reduced credit risk.
Monetary Policy Stance and Future Meetings
The Monetary Policy Committee has maintained the Required Reserve (RR) ratio for commercial banks at 13 percent. This stable reserve requirement helps manage liquidity in the banking system. Additionally, the interest rate on the standing deposit facility remains unchanged at 5 percent, providing a floor for interbank rates and a facility for banks to deposit excess funds with the central bank. The interest rate on the standing lending facility also continues at 15 percent, as decided by the committee, serving as a ceiling for interbank rates and a source of overnight liquidity for commercial banks. These policy rates are critical tools for the CBG in influencing monetary conditions. Looking ahead, the next Monetary Policy Committee meeting is scheduled to take place on Wednesday, November 25, 2026. Following this meeting, the policy decision announcement is set for Thursday, November 26, 2026, providing clarity on the future direction of monetary policy in The Gambia.