The Bank of Sierra Leone has increased its Monetary Policy Rate by 0.25 percentage points to 17.25 percent, citing persistent inflationary pressures and growing risks to price stability. This decision was made by the Monetary Policy Committee at its meeting on 24 September 2026 and approved by the Bank's Board of Directors on 28 September. The new policy rate took effect on 29 September 2026.
According to the Bank of Sierra Leone, headline inflation has been on the rise, increasing from 10.24 percent in March to 14.77 percent in June 2026, before rising to 14.89 percent in July and 15.66 percent in August. The Bank attributed the continued inflationary pressures to tax policy measures, higher domestic food prices linked to climate-related supply constraints, and elevated energy prices resulting from global uncertainties.
The Monetary Policy Committee noted that the inflation outlook remains exposed to upside risks and that further tightening of monetary policy was necessary to contain potential second-round effects, anchor inflation expectations, and maintain macroeconomic stability. Alongside the Monetary Policy Rate increase, the Bank adjusted its Standing Lending Facility Rate to 21.25 percent and the Standing Deposit Facility Rate to 11.75 percent.
The Bank of Sierra Leone reported that Sierra Leone's economic growth is expected to moderate to 4.0 percent in 2026, compared with 4.8 percent in 2025. The Bank attributed the projected slowdown to higher energy costs and global supply-side disruptions. However, growth could gradually recover through the implementation of the Government's Feed Salone Programme and other growth-enhancing initiatives.
The Bank expressed concern over the potential impact of continued geopolitical tensions, particularly in the Middle East, on energy prices, supply chains, and domestic economic activity. On the external sector, the Bank reported that the country's trade deficit widened during the second quarter of 2026 as export earnings declined while the import bill increased.
Despite the challenges, the Bank of Sierra Leone reported strong growth in commercial bank lending to the private sector, which expanded by 52.2 percent, exceeding the 39.40 percent target under the IMF Extended Credit Facility programme. The banking sector remained broadly stable, resilient, and profitable, supported by adequate capital buffers and compliance with most prudential requirements.
The Bank of Sierra Leone said it would continue to monitor inflation and other economic developments and stands ready to recommend further policy measures if inflationary pressures become more broad-based. The next meeting of the Monetary Policy Committee is scheduled for 17 December 2026.
Key points
- The Bank of Sierra Leone increased its Monetary Policy Rate to 17.25 percent to combat rising inflation.
- The country's inflation rate rose to 15.66 percent in August 2026.
- Sierra Leone's economic growth is expected to moderate to 4.0 percent in 2026.
