Freetown, 24 June 2025 – In a move aimed at stimulating economic activity and reducing the cost of borrowing, the Bank of Sierra Leone (BSL) has announced a one-percentage-point reduction in its Monetary Policy Rate (MPR), bringing it down to 23.75%. The new rate takes effect today, 24 June 2025.
The decision, taken at the Monetary Policy Committee (MPC) meeting held on 23 June and chaired by Governor Dr Ibrahim L. Stevens, also saw adjustments to other key policy instruments.
The Standing Lending Facility Rate (SLFR) has been lowered to 26.75%, while the Standing Deposit Facility Rate (SDFR) now stands at 17.25%.
According to the BSL, the rate cut comes amid encouraging signs in the macroeconomic environment, particularly a sharp drop in inflation. Inflation fell from 13.78% in December 2024 to 7.55% in May 2025 — a trend attributed to prudent monetary and fiscal policies, stable fuel prices, and a relatively steady exchange rate.
“This easing of the policy rate is designed to provide more support to the private sector and encourage investment-led growth,” the MPC stated.
Despite a challenging global economic backdrop marked by trade tensions and revised growth forecasts by key global institutions — including the IMF (2.8%), OECD (2.9%), and World Bank (2.3%) for 2025 — the MPC remains cautiously optimistic. It noted that global inflation is expected to decline in the coming years due to tighter monetary policies and falling commodity prices, which could have a stabilising effect on Sierra Leone’s economy.
Domestically, Sierra Leone’s economic outlook remains positive, with GDP growth projected at 4.5% in 2025, up from 4.0% the previous year. The growth trajectory is expected to continue, reaching 4.7% in 2026 and 2027, driven by strong performance in mining, agriculture, and services, alongside government initiatives to boost agricultural productivity.
However, the MPC acknowledged potential external risks, including global supply chain disruptions and ongoing geopolitical tensions, which could impact economic stability.
In terms of external trade, the country’s deficit widened in the first quarter of 2025 due to increased import costs and reduced export earnings. Foreign exchange reserves have also declined, now covering only 1.8 months of imports. On the fiscal side, a growing budget deficit was recorded, driven by reduced revenue collection and rising interest payments. Nevertheless, reductions in spending on goods, services, and subsidies helped narrow the primary deficit.
Financial sector developments in early 2025 showed a contraction in reserve money and modest growth in broad money (M2). While credit to the private sector improved, the MPC noted it remains below levels necessary to drive meaningful private investment.
The Committee concluded by reiterating its commitment to supporting economic recovery while keeping a close watch on inflationary trends. It stressed the importance of an inclusive credit environment to enhance private sector participation in the economy.
The next Monetary Policy Committee meeting is slated for 25 September 2025.
