Foreign Exchange Intervention - Bank of Sierra Leone
Foreign Exchange Intervention - Bank of Sierra Leone
Foreign Exchange Intervention - Bank of Sierra Leone
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4. DEVELOPMENTS OF FOREIGN<br />
EXCHANGE REGIMES IN SIERRA LEONE<br />
PERIOD<br />
TYPES OF<br />
REGIMES<br />
EXCHANGE<br />
RATE<br />
COMMENTS<br />
1 1964 - 1978 The <strong>Leone</strong> was pegged<br />
to the Pound Sterling<br />
Le2.00 = GBP1.00<br />
The <strong>Leone</strong> was pegged to the Pound<br />
Sterling due to the stability <strong>of</strong> the<br />
latter.<br />
2 1978 – 1982 The <strong>Leone</strong> was linked<br />
to the IMF’s Special<br />
Drawing Rights (SDR)<br />
3 1982 – 1983 The Two Tier System or<br />
dual <strong>Exchange</strong> Rate<br />
System<br />
Le1.00 = SDR0.731556<br />
Official market determined<br />
rates for Government<br />
transactions Le2.45 =<br />
US$1.00 (commercial<br />
market determined rates for<br />
other transactions<br />
The Pound became very unstable in<br />
1979. This period was referred to as<br />
“The winter <strong>of</strong> discontent” which had<br />
unstabilizing effect on the British<br />
Pounds which resulted into delinking<br />
from the latter.<br />
The depletion <strong>of</strong> the Reserve during<br />
the OAU meetings in the 80s led to the<br />
two tier system to attract more foreign<br />
exchange to beef up the Reserves.<br />
Commercial market rates were<br />
determined at fortnightly auctions held<br />
by the Central bank<br />
6
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