The Gambian currency is set to continue its impressive performance as the best-performing currency in 2023 underpinned by increased remittances and a boost in tourism-related income.
According to Bloomberg, so far in 2023, the Dalasi has appreciated by 0.9% against the US dollar, marking the most significant gain among the 23 African currencies. It is also one of just three currencies within this group that have experienced such advancement.
🇬🇲 THE GAMBIAN #DALASI (GMD)
Gambia’s currency (Dalasi) is Africa’s best-performing currency in 2023, supported by stronger remittance and tourism inflows.
The dalasi has so far gained 0.9% against the dollar in 2023 – the most among 23 African currencies and one among three… pic.twitter.com/TACWeKDiB0
— BitKE (@BitcoinKE) September 25, 2023
The currency’s strength has been bolstered by external financial support for the budget and disbursements from an International Monetary Fund (IMF) program, as stated by Governor, Buah Saidy, in an interview.
“Going forward, we expect the Dalasi to appreciate slightly against major trading currencies, especially the U.S. dollar because we see remittances growing,” Saidy said.
“Our tourism season starts from October through December [2023], so there will be inflows of foreign exchange from there as well.”
According to the latest data from the central bank:
- Gambia received $129.7 million in remittances from its citizens residing abroad during the first two months of 2023
- In contrast, the country received $507 million in remittances in 2022
- Additionally, tourist arrivals witnessed a significant increase, rising to 174,490 in the previous year from 102,460 the year before. This surge followed a decline to 89,232 in 2020 due to the impact of the COVID-19 pandemic
The Dalasi’s good performance comes in an environment where several African currencies are depreciating against a strong U.S. dollar. The worst performing currencies against the dollar across the continent include:
- Zimbabwean Pound => -617% (% depreciation)
- Burundian Franc => -36%
- Egyptian Pound => -25%
- Congolese Franc => -21%
- Sierra Leonean Leone => -19%
- Rwandan Franc => -12.8%
- South African Rand => -11%
- Zambian Kwacha => -11%
The Kwacha, which was one of the best performing currencies globally in 2023, has reportedly taken a hit against the U.S. dollar, declining 11% since January 2023 as private sector spending contracts, inflation hits record highs, and the central bank of the country raises interest rates to around 10% to combat rising prices, an analysis by Yahoo magazine found. The currency is subject to uncertainty due to debt restructuring and dwindling copper production.
Gambia’s currency, however, is anticipated to receive further support from peanut exports as the harvest season is set to begin in October 2023, according to Governor Saidy.
Consumer price inflation in Gambia has increased for the second consecutive month, reaching 18.4% in July 2023. Saidy predicts that price growth is likely to reach its highest point in December 2023 and then gradually decline, falling to less than 10% by the middle of 2024.
Gambia is currently in negotiations for a new program with the International Monetary Fund (IMF) following the successful completion of a 39-month extended credit facility worth $94 million in June 2023.
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