Political sketch
Formerly part of British West Africa. Independent from the United Kingdom on 27 April 1961.
By 1495 there was a Portuguese fort on the site of Freetown. Sierra Leone exported slaves and ivory in return for manufactured goods. The English built trading posts on Bund and York islands in the 1600s, but no European power exercised control over Sierra Leone. British abolitionists, organized as the Sierra Leone Company, founded Freetown in 1787 as a settlement for freed and runaway slaves. After the British Parliament made the slave trade illegal in 1807, the government took over the not particularly successful settlement as a base for naval operations against the slave trade, and the area around Freetown became a British colony on 1 January 1808. About 50,000 slaves from all over West Africa were brought from captured slave ships to Sierra Leone, where they were liberated and successfully became members of its society. The British gradually explored the hinterland and proclaimed it a protectorate in 1896. A revolt against taxes levied by the British began in 1898 and lasted a year before the British suppressed it.
Sierra Leone became independent from the United Kingdom on 27 April 1961. A military coup overthrew the civilian government in March 1967; the military was ousted a month later and civilian rule was restored. Sierra Leone became a one-party state in 1978. In 1991 a civil war broke out; the Revolutionary United Front, notorious for its practice of amputating the limbs of children, controlled much of the country. It supported itself by illegal diamond mining. Sierra Leone also became embroiled in a border dispute with Liberia, which itself was suffering a civil war. Widespread fighting wrecked the economy. A military regime took power in April 1992; another coup occurred in May 1997. The government and rebels signed a peace agreement on 7 July 1999, but the rebels often violated it. The rebel leader, Foday Sankoh, was captured on 17 May 2000. The main export is diamonds.
Wars since 1500
Sierra Leone Revolt of 1898; Sierra Leonean Civil War of 1991-1999 (also involved some fighting against Liberia).
Convertibility
The sterling area:
On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914 gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925 the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.
The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973 the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong had abandoned sterling as its anchor currency. The United Kingdom abolished exchange controls on 24 October 1979, ending the sterling area.
The West African Currency Board:
In late 1915, the Gold Coast (now Ghana), Nigeria, and Sierra Leone passed ordinances making British notes legal tender. The West African Currency Board circulated the notes; at the time, it was not allowed to issue notes. Circulation of British notes was a temporary measure intended to reduce a shortage of currency during the First World War, when German submarine warfare made it risky to transport coins by ship from the United Kingdom, where they were minted.
Sierra Leone alone:
Sierra Leone defined sterling area currencies as foreign currencies on 26 Mary 1965 (Sierra Leone, amendment to Exchange Control Act, 26 May 1965, cited in Bank of Sierra Leone annual report 1965: 30). It left the sterling area on 23 June 1972.
Other
Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): 1977 (oil and interest rate shocks), 1983-1984 (foreign currency bank debt), 1986-1995 (foreign currency bank debt), 1997-1998 (local curency debt).
Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): A crisis in the 1990s, with nonperforming loans reaching 45-50% of the total in 1995.
Frankel and Rose (1996) list of currency crashes: 1983, 1989.
No exchange rate data in Reinhart and Rogoff (2003).
References
Primary sources:
--Laws and decrees:
Great Britain (United Kingdom). Gazette. 1665-present. Oxford Gazette (1996-1666); London Gazette (1666-present). Oxford (1665-1666); London (1666-present): His/Her Majesty's Stationery Office from 1903. Online at <http://www.gazettes.online.co.uk>; as of September 2005, gazettes since 1900 are available.
Sierra Leone. Gazette. 1808-present. The Sierra Leone Gazette. Freetown: Government Printing Department (in recent years).
--Publications of monetary authorities:
Bank of Sierra Leone. Annual report. 1964-present. Annual Report and Statement of Accounts for the Year Ended .... Freetown: Bank of Sierra Leone.
Bank of Sierra Leone. Bulletin. 1968-present. Economic Trends (1968-1993); BSL Bulletin (1995-present). Freetown: Bank of Sierra Leone. (The BSL Bulletin was the combined successor to Economic Trends, Economic Review, and Quarterly Economic Report.)
Bank of Sierra Leone. Quarterly economic report. 1982-1994. Quarterly Economic Report. Freetown: Bank of Sierra Leone.
Bank of Sierra Leone. Review. Quarterly Statistical Review (1965-1966); Economic Review (1966-1989). Freetown: Bank of Sierra Leone.
Great Britain (United Kingdom). West African Currency Board. Annual report. 1913/1914-1972/1973. Report of the West African Currency Board for the Period Ended 30th June 1914 (1913/1914); Report of the West African Currency Board for the Year Ended 30th June ... (1914/1915-1971/1972); Final Report of the West African Currency Board for the Period 1st July, 1972 to 31st October, 1973 (1972/1973). London: Darling and Sons for His Majesty's Stationery Office (1913/1914-1917/1918); His Majesty's Stationery Office (1918/1919-1919-1920); Waterlow and Sons (1920/1921-1972/1973).
West African Currency Board. See Great Britain (United Kingdom). West African Currency Board.
--Web site of the current monetary authority (viewed 20 September 2005):
<http://www.bankofsierraleone-centralbank.org>
--Other publications or Web sites:
IMF. International Monetary Fund. 1946-1971 (irregular). Schedule of Par Values. Washington: International Monetary Fund.
Loynes, J[ohn] B[arraclough de]. 1961. Report on the Problems of the Future Currencies of Sierra Leone and the Gambia. Gambia Sessional Paper No. 12/61. Bathurst: Government Printer.
Main secondary sources:
Anin, T. E. 2000. Banking in Ghana. Accra: Woeli Publishing Services.
Barclays Bank (Dominion, Colonial and Overseas). 1938. A Banking Centenary: Barclays Bank (Dominion, Colonial and Overseas), 1836-1936. Plymouth, England: Mayflower Press, for private circulation.
Chalmers, [Sir] Robert. 1893. A History of Currency in the British Colonies. London: Eyre and Spottiswoode for Her Majesty's Stationery Office.
Cox-George, N. A. 1961. Finance and Development in West Africa: The Sierra Leone Experience. London: Dennis Dobson.
Fyfe, Christopher. 1962. A History of Sierra Leone. London: Oxford University Press.
Crooks, J[ohn] J[oseph]. 1972 [1903]. A History of the Colony of Sierra Leone, Western Africa; With Maps and Appendices. New foreword by Donald Franklin Joyce. Northbrook, Illinois: Metro Books.
Fry, Richard. 1976. Bankers in West Africa: The Story of the Bank of British West Africa Limited. London: Hutchison.
IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)
Loynes, J[ohn] B[arraclough de]. 1962. The West African Currency Board 1912-1962. London: West African Currency Board.
Taylor, Alwyn B. 1980. Money and Banking in Sierra Leone. Milan: Finafrica-Cassa di Risparmio delle Provincie Lombarde.
Vice, David. 1983. The Coinage of British West Africa and St. Helena, 1684-1958. Birmingham: Peter Ireland (Format) Ltd.
Monetary authorities: Sierra Leone
| Dates | Type | Name | Source | Remarks |
| 1791
-September 1808 |
government issue (or at least quasi government issue) | Sierra Leone Company (headquarters London, England) | Fyfe (1962: 43, 71, 646, 650) | The local governor in Sierra Leone issued notes in 1791 while colonists awaited a shipment of Sierra Leone Company coins from England. The notes were based on bills of exchange drawn on the company's directors. The first coins were issued in 1792; see the "Exchange rate arrangements" section. The governor issued notes again in 1798. |
| September 1808
-1816 |
government issue | government of Sierra Leone (headquarters Freetown, Sierra Leone) | Sierra Leone, decision of local Council, 28 July 1808, cited in Cox-George (1961: 97 n. 13); Fyfe (1962: 110, 655) | The government issued its own notes when the Sierra Leone Company refused to furnish notes at less than a 4% premium on London. The Sierra Leone Company withdrew its notes from circulation from 3 September-20 October 1808. |
| 1816
-1898 |
coins only | Spanish silver dollar until 1880; also, pound sterling after 1825 and French silver 5-franc piece from 1843 | Fyfe (1962: 117, 656) | The government retired its note issue from circulation. |
| 1898
-25 June 1913 |
dollarization | pound sterling (issued by central bank Bank of England [headquarters London, England]) | United Kingdom, incorporation papers of Bank of British West Africa, 31 March 1894 cited in Richard Fry (1976: 26) | The locally owned Commercial Bank of West Africa had opened in Freetown in 1882 but had closed less than a year later when its founder died (Anin 2000: 13). It was the first bank in Sierra Leone, but the first durable bank was the Bank of British West Africa (headquarters Liverpool, later London, England), in Freetown, in 1898 (Richard Fry 1976: 27). The second durable bank was the Colonial Bank (headquarters London, England), in Freetown, in 1917 (Barclays Bank [Dominion, Colonial and Overseas] 1938: 59). |
| 26 June 1913
-3 August 1964 |
joint currency board (as part of a currency union) | West African Currency Board (headquarters London, England) | United Kingdom, Secretary of State for the Colonies, Memorandum Defining the Constitution, Duties and Powers of the West African Currency Board, 6 December 1912, reprinted in West African Currency Board annual report, 30 June 1914: 7; Order in Council of 7 May 1913, cited in West African Currency Board annual report, 30 June 1914: 4; Secretary of State for the Colonies, Memorandum Defining the Constitution, Duties and Powers of the West African Currency Board, 2 September 1949, reprinted in West African Currency Board annual report, 30 June 1949: 15 | The United Kingdom established the West African Currency Board to capture seigniorage for the colonial governments of Gambia, the Gold Coast (now Ghana), Nigeria, and Sierra Leone. Local proclamations of 26 June 1913 (cited in cited in West African Currency Board annual report, 30 June 1914: 4) allowed the British Order in Council of 7 May 1913 to enter into force. The board's original constitution only allowed it to issue coins, which were more widely used by Africans than notes. A revision of 25 November 1915 (reprinted in West African Currency Board annual report, 30 June 1916: 6-7) allowed it to issue notes. About October 1915 the currency board issued British notes as a temporary measure to meet the demand for currency in the Gold Coast (now Ghana), Nigeria, and Sierra Leone, but not Gambia. The colonies where the board issued British notes passed local ordinances making the notes legal tender (West African Currency Board annual report, 30 June 1916: 2). The board issued its first notes in Sierra Leone in September 1916 (West African Currency |
| 4 August 1964
-present (2005) |
central bank | Bank of Sierra Leone (headquarters Freetown, Sierra Leone) | Sierra Leone, Bank of Sierra Leone Act, 27 March 1963, cited in Bank of Sierra Leone Web site, viewed 20 September 2005 | Sierra Leone chose to establish a full-fledged central bank rather than the monetary institute proposed by J. B. Loynes, an adviser from the Bank of England. The central bank issued the first coins of independent Sierra Leone on 4 August 1964 (Bank of Sierra Leone annual report 1964: 4). |
Exchange rate arrangements: Sierra Leone
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 14 May 1787
-1791 |
fixed; used British, Spanish and other coins | apparently no formal basis; the Sierra Leone Company itself was chartered by United Kingdom, 31 George III, cap. 55, 1791, cited in Fyfe (1962: 644, note to p. 27, line 18) | Settlement of Sierra Leone by colonists (emancipated slaves from Britain and some whites) began in 1787. In the early years of the colony, payments were often made in bars of iron (Fyfe 1962: 9). | |
| 1791
-31 December 1795 |
pegged, local £1 = UK£1 | decision of Sierra Leone Company, 1791, cited in Cox-George (1961: 95-6); Fyfe (1962: 43, 71, 646, 650) | In practice, a clean? float. | The exchange rate changed from fixed to pegged when the Sierra Leone Company issued notes. The local pound was not legally a separate unit from the pound sterling. Spanish silver dollars were commonly used as a unit of account at $4 = £1. The Sierra Leone Company itself issued dollar-denominated notes. Company-issued notes depreciated against coins. Henry Thornton, chairman of the Sierra Leone Company, had coins struck for Sierra Leone by the Soho Mint, Birmingham, in 1791, but they did not arrive until 1792. Coins were struck until 1805. They were issued in denominations of 1 cent to $1. Coins of 10 cents were also called macutas, after a unit of account used along the western coast of Africa, especially Angola. The Sierra Leone Company $1 piece had 8% less silver than the Spanish silver dollar, which implies that it drove the Spanish silver dollar out of circulation locally (Chalmers 1893: 208; Cox-George 1961: 95-6). |
| 1 January 1796
-29 November 1808 |
pegged, local $1 = Spanish silver $1 | Sierra Leone, decision of local Council, 1 January 1796, cited in [to come] | In practice, a clean? float. | The dollar replaced the pound as unit of account. Locally issued notes continued to be depreciated against the coins into which they were nominally convertible. |
| 30 November 1808
-1816 |
peged, local £1 = UK£1 | Sierra Leone, governor's recall of dollar-denominated notes, 29 November 1809; see Fyfe 1962: 107-8, 655 | In practice, a clean? float. | The government recalled its dollar-denominated notes and replaced them with pound-denominated notes, reflecting the governor's preference for a unit of account like that of the United Kingdom. |
| 1816
-1822 |
fixed; local £1 = UK£1 | Fyfe (1962: 117, 646) | The government withdrew from circulation its notes, which had often depreciated from par value. | |
| 1822
-1825 |
fixed; Spanish silver $4 = UK£1, or Spanish silver $1 = UK 5 shillings (60 pence) | Sierra Leone, decision of local Council, 1822, cited in Fyfe (1962: 142, 660) | Established a legal rating for the pound sterling. Recall that in British monetary system of the time, £1 = 12 shillings (s.) and 1 shilling = 12 pence (d.), so £1 = 240d. The government established the rating in response to a threat by a cartel of merchants to devalue the silver dollar to 4 shillings 4 pence (52 pence). Merchants objected to the application of a British Treasury order of 1822 directing government bills of exchange to be publicly auctioned, as in other colonies (Crooks 1972 [1903]: 248 [recheck page reference]). | |
| 1825
-29 September? 1843 |
fixed; used various foreign gold and silver coins | United Kingdom, Order in Council, 23 March 1825; Chalmers (1893: 209) | In practice, Spanish silver $1 = UK 4 shillings 4 pence (52 pence), the rate set by the Order in Council of 1825. | British currency became legal tender along with the Spanish dollar. Spanish and other silver dollars and gold doubloons were the most common larger coins of this period; "cut dollars," dollars divided into four, were widely used as quarter-dollars. |
| 30 September? 1843
-April 1880 |
fixed; used various foreign gold and silver coins | United Kingdom, two Orders in Council, 10 June 1843 | In practice, Spanish silver $4.80 = UK£1, or Spanish silver $1 = UK 4 shillings 2 pence (50 pence), the rate set by one of the Orders in Council of 1843. | The starting date is a guess based on the date of a local proclamation in the sister colony of Gambia (cited in Chalmers 1893: 220n.). British coins and French 5-franc silver pieces predominated; certain French, and Spanish coins were also legal tender in British possessions in West Africa. In 1852 US gold coins were made legal tender in British possessions in West Africa (United Kingdom, Order in Council and Proclamation, 20 June 1852), but they were never widely used. Belgian, Italian, and Swiss 5-franc pieces were made legal tender alongside French pieces (United Kingdom, Order in Council and Proclamation, 27 November 1874, published locally in Sierra Leone 5 January 1875, cited in Chalmers 1893: 211n). |
| April 1880
-25 June 1913 |
fixed; local £1 = UK£1 | Sierra Leone, Ordinance No. 2 of 1880, cited in Chalmers (1893: 211); Crooks (1972 [1903]: 248) | Demonetized dollar coins, leaving British coins as legal tender. | |
| 26 June 1913
-3 August 1964 |
fixed (as part of a currency union); West African £1 = UK£1 | United Kingdom, Secretary of State for the Colonies, Memorandum Defining the Constitution, Duties and Powers of the West African Currency Board, 6 December 1912, reprinted in West African Currency Board annual report, 30 June 1914: 7; Order in Council of 7 May 1913, cited in West African Currency Board annual report, 30 June 1914: 4; Secretary of State for the Colonies, Revised Regulation Defining the Constitution, Duties and Powers of the West African Currency Board, 11 July 1924, reprinted in West African Currency Board annual report, 30 June 1924: 5 | The British government gave its West African colonies their own currency. Local proclamations of 26 June 1913 (cited in cited in West African Currency Board annual report, 30 June 1914: 4) allowed the British Order in Council of 7 May 1913 to enter into force. The appreciation of silver against gold up to 1920 caused hoarding and shortages of West African silver coins, even though they were not full-bodied. Technically, West African Currency Board coins were initially redeemable in gold, though de facto sterling was always the anchor. The currency board constitution was amended in 1924, when Britain was off the gold standard, to allow notes and coins to be directly redeemable in pounds sterling. French silver 5-franc pieces, known locally as dollars, continued to be widely used, and were even made legal tender in Gambia and Sierra Leone in 1913 at UK 3 shillings 10.5 pence (United Kingdom, Sierra Leone and Gambia Coinage Order and another order in council, both 7 May 1913, cited in West African Currency Board annual report, 30 June 1914: 4). The 5-franc pieces were | |
| 4 August 1964
-5 August 1965 |
pegged; 2 Sierra Leone leones = UK£1 = 1.22414g gold | Sierra Leone, Bank of Sierra Leone Act, 27 March 1963, cited in Bank of Sierra Leone Web site, viewed 20 September 2005; IMF ARER (1968: 448) | Introduced a decimalized national currency at 2 Sierra Leone leones = West African £1. Leone comes from the name of the country, which means "lion mountain" in Italian, the dominant language of map-making in the 1500s. West African Currency Board currency ceased to be legal tender on 4 February 1966 (Bank of Sierra Leone annual report 1966: 32). | |
| 6 August 1965
-21 November 1967 |
pegged; 2 Sierra Leone leones = UK£1, or 1 Sierra Leone leone = US$1.40 = 1.24414g gold | IMF, 40th Schedule of Par Values, 20 August 1965: 5, 20 | Sierra Leone registered a gold parity with the IMF, in effect also linking the currency indirectly to the U.S. dollar through the Bretton Woods system. | |
| 22 November 1967
-22 August 1971 |
pegged; 2 Sierra Leone leones = UK£1, or 1 Sierra Leone leone = US$1.20 = 1.06641g gold | Bank of Sierra Leone annual report 1967: 22 | Followed the devaluation of the pound sterling on 18 November 1967. | |
| 23 August 1971
-20 December 1971 |
pegged; 2 Sierra Leone leones = UK£1, or 1 Sierra Leone leone = 1.06641g gold (nominally) | Bank of Sierra Leone annual report, 30 June 1972: 41; IMF ARER (1972: 371-2) | Gold convertibility for all countries ended in practice when the United States abandoned the gold standard on 15 August 1971. The Sierra Leone leone remained pegged to the pound sterling, in effect unpegging it from the US dollar. | |
| 21 December 1971
-26 June 1972 |
pegged; 2 Sierra Leone leones = UK£1, or 1 Sierra Leone leone = US$1.30286 = 1.06641g gold (nominally) | Bank of Sierra Leone annual report, 30 June 1972: 41; IMF ARER (1972: 372) | Repegged to the US dollar after the United States devalued the dollar against gold on 18 December 1971. The pound sterling remained the anchor currency. Sierra Leone availed itself of wider margins. The central bank implies that it began at or near the start of this period, while the IMF notes a date of 23 January 1972 without specifically mentioning that it was the first day for wider margins (Bank of Sierra Leone annual report, 30 June 1972: 41; IMF ARER 1973: 410). | |
| 27 June 1972
-31 March 1978 |
pegged; 2 Sierra Leone leones = UK£1, or 1 Sierra Leone leone = 1.06641g gold (nominally) | Bank of Sierra Leone annual report, 30 June 1972: 41; IMF ARER (1973: 410) | Continued to use the pound sterling as the anchor currency after the United Kingdom floated the pound sterling on 23 June 1972. At the time, two-thirds of Sierra Leone's exports and one-quarter of its imports were with the United Kingdom. | |
| 1 April 1978
-1 November 1978 |
pegged; 2 Sierra Leone leones = UK£1 | International Monetary Fund, Board of Governors, Resolution No. 31-4, 30 April 1976 ("Second Amendment") | The system of gold par values officially ended by agreement of IMF members. | |
| 2 November 1978
-16 January 1983 |
pegged to rigid basket; 1 Sierra Leone leone = 0.731566 SDR | IMF ARER (1979: 355) | A "flourishing" unofficial parallel market existed (Bank of Sierra Leone annual report, 30 June 1984: 25). | Switched to the SDR as the anchor currency because the pound sterling was having problems at the time. The switch involved a 5% depreciation relative to the prevailing cross rate. On 17 December 1982, the government announced the dual rate system below. The results of the first auction were announced on 17 January 1983. In the interim, from 20 December 1982, commercial banks were allowed by buy foreign currency at not less than 2.30 Sierra Leone leones = US$1 (IMF ARER 1984: 408). |
| 17 January 1983
-30 June 1983 |
pegged to rigid basket, dual rate; official rate 1 Sierra Leone leone = 0.731566 SDR (IMF: managed float) | Bank of Sierra Leone annual report, 30 June 1984: 25; IMF ARER (1983: 406) | The second rate, called the commercial rate floated. In addition, a "flourishing" unofficial parallel market existed (Bank of Sierra Leone annual report, 30 June 1984: 25). | Established a commercial exchange rate determined by auctions. The IMF classified the exchange rate as a managed float on the basis of the commercial rate, which may have accounted for the bulk of transactions. I classify it as pegged because the main official rate remained pegged. |
| 1 July 1983
-20 February 1985 |
pegged; 2.50 Sierra Leone leones = US$1 | Bank of Sierra Leone annual report, 30 June 1984: 25 | RR: Parallel market premium of 73% in January 1985, when data begin. | Switched to the US dollar as the anchor currency, unified the exchange rate, and devalued. The cross rate before devaluation was approximately 1.28 Sierra Leone leones = US$1. The reason for unifying the exchange rate was that the previous second rate had been unsuccessful in attracting much foreign exchange to the banking system. |
| 21 February 1985
-26 June 1986 |
pegged to rigid basket; 5.7228 Sierra Leone leones = 1 SDR | Bank of Sierra Leone annual report, 30 June 1985: 22; 1986: 53 | RR: Parallel market premium in mid double digits. | Devalued to 6 Sierra Leone leones = US$1, then immediately switched to the SDR as the anchor currency at this cross rate. |
| 27 June 1986
-30 August 1987 |
independent float | Bank of Sierra Leone annual report, 30 June 1987: 16, IMF ARER (1987: 441) | An unofficial parallel
market existed. The
central bank shows the
average parallel rate
for July 1987 as 45
Sierra Leone leones =
US$1 (Bank of Sierra
Leone annual report,
20 June 1988: 14).
RR: Parallel market premium often exceeds 100%. |
Floated. The IMF after the fact describes a peg at 53 Sierra Leone leones = US$1 from 1 May 1987 (IMF ARER 1989: 426). The central bank annual reports of the period do not mention this rate, so it may have been a de facto rate. |
| 31 August 1987
-17 March 1988 |
pegged; 23 Sierra Leone leones = US$1 | Bank of Sierra Leone annual report, 30 June 1988: 14; IMF ARER (1988: 429) | An unofficial parallel
market existed. The
central bank shows the
average parallel rate
for December 1987 as
57 Sierra Leone leones
= US$1, and the
average rate for
February 1988 as 32
Sierra Leone leones =
US$1 (Bank of Sierra
Leone annual report,
20 June 1988: 14).
RR: Parallel market premium often exceeds 100%. |
Revalued compared to recent rates; volume on foreign exchange market was sufficiently thin to permit this. |
| 18 March 1988
-7 August 1988 |
pegged; 29 Sierra Leone leones = US$1 | Bank of Sierra Leone annual report, 30 June 1988: 14; IMF ARER (1989: 428) | An unofficial parallel
market existed. The
central bank shows the
average parallel rate
for June 1988 as 48
Sierra Leone leones =
US$1(Bank of Sierra
Leone annual report,
20 June 1988: 14).
RR: Parallel market premium exceeds 1,000% starting May 1988. |
Devalued. |
| 8 August 1988
-12 August 1988 |
pegged; 37 Sierra Leone leones = US$1 | IMF ARER (1989: 428) | RR: Parallel market premium exceeds 1,000%. | Devalued. |
| 13 August 1988
-8 January 1989 |
pegged; 40 Sierra Leone leones = US$1 | IMF ARER (1989: 428) | RR: Parallel market premium exceeds 1,000%. | Devalued. |
| 9 January 1989
-2 April 1989 |
pegged; 44 Sierra Leone leones = US$1 | IMF ARER (1990: 434) |
RR: Parallel market premium exceeds 1,000%. |
Devalued. |
| 3 April 1989
-14 January 1990 |
pegged; 65 Sierra Leone leones = US$1 | IMF ARER (1990: 434) |
RR: Parallel market premium mostly in triple digits. |
Devalued. |
| 15 January 1990
-24 April 1990 |
pegged; 120 Sierra Leone leones = US$1 | IMF ARER (1991: 438) | RR: Parallel market premium in mid triple digits. | Devalued. |
| 25 April 1990
-1999 |
independent float | Bank of Sierra Leone annual report, 30 June 1992: 6; IMF ARER (1991: 440) | An unofficial parallel
market existed, but the
parallel market
premium almost
disappeared by mid
1992 (Bank of Sierra
Leone annual report,
30 June 1992: 6).
RR: Parallel market premium falls to single digits by 1992 but climbs above 40% in 1998 until data cease in December 1998. |
Floated. |
| 1999
-present (2005) |
independent float, dual rate | IMF ARER (2000: 782) | The second rate was apparently an independent float; see Remarks. | Introduced a dual rate on a date specified neither in IMF ARER nor in central bank reports. The official rate was set by the central bank based on the weighted average market rate of the last 5 days and the weekly foreign-exchange auction. The second rate, being able to fluctuate daily, could differ from the official rate. Curiously, although IMF ARER (2000: 782, 786) notes the presence of a dual rate for the first time, it also says "no significant changes" occurred to the exchange rate arrangement in 1999. It is therefore possible that the dual rate was simply a codification of previous practice. On 9 February 2000 the central bank began weekly auctions of predetermined amounts of foreign reserves, ending direct allocation of foreign exchange (Bank of Sierra Leone annual report 2000: 19, 21). |