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 Fiddling with Gambia's money ?

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T O P I C    R E V I E W
toubab1020 Posted - 06 Aug 2019 : 14:06:10
Dear Reader MAYBE you are able to understand this financial gobbledgook ,I cannot , are you able to "clarify" this assembalage of words in a way that can be readily understood by THE AVERAGE Person ?
Thank you (In advance of a reply ?)
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Momodou Camara (Acca) August 6, 2019

The timing and introduction of the new banknotes and minting of coins-(if any) is bad and ill conceived. From our financial news terminal here at Money and Markets @ Standard Newspaper, we have been looking at the latest move by the Central Bank of The Gambia.

More radical instruments
Some have envisaged the use of what Milton Friedman once called “helicopter money” whereby the central bank would make direct transfers to citizens in order to lift inflation up to the central bank’s intended target. Such policy option could be particularly effective at the zero lower bound.

Banking supervision and other activities
In some countries a central bank, through its subsidiaries, controls and monitors the banking sector. In other countries banking supervision is carried out by a government department such as the UK Treasury, or by an independent government agency, for example, UK’s Financial Conduct Authority. It examines the banks’ balance sheets and behaviour and policies toward consumers. Apart from refinancing, it also provides banks with services such as transfer of funds, bank notes and coins or foreign currency.

Thus it is often described as the “bank of banks”. Many countries will monitor and control the banking sector through several different agencies and for different purposes.

the Bank regulation in the United States for example is highly fragmented with 3 federal agencies, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or Office of the Comptroller of the Currency and numerous others on the state and the private level.

There is usually significant cooperation between the agencies. For example, money center banks, deposit-taking institutions, and other types of financial institutions may be subject to different (and occasionally overlapping) regulation.

Some types of banking regulation may be delegated to other levels of government, such as state or provincial governments. Any cartel of banks is particularly closely watched and controlled. Most countries control bank mergers and are wary of concentration in this industry due to the danger of groupthink and runaway lending bubbles based on a single point of failure, the credit culture of the few large banks.

Independence
Governments generally have some degree of influence over even “independent” central banks; the aim of independence is primarily to prevent short-term interference.

In 1951, the Deutsche Bundesbank became the first central bank to be given full independence, leading this form of central bank to be referred to as the “Bundesbank model”, as opposed, for instance, to the New Zealand model, which has a goal (i.e. inflation target) set by the government. Advocates of central bank independence argue that a central bank which is too susceptible to political direction or pressure may encourage economic cycles (“boom and bust”), as politicians may be tempted to boost economic activity in advance of an election, to the detriment of the long-term health of the economy and the country.

In this context, independence is usually defined as the central bank’s operational and management independence from the government.

Central bank independence is usually guaranteed by legislation and the institutional framework governing the bank’s relationship with elected officials, particularly the minister of finance.

Central bank legislation will enshrine specific procedures for selecting and appointing the head of the central bank.

Often the minister of finance will appoint the governor in consultation with the central bank’s board and its incumbent governor.

In addition, the legislation will specify banks governor’s term of appointment.

The most independent central banks enjoy a fixed non-renewable term for the governor in order to eliminate pressure on the governor to please the government in the hope of being re-appointed for a second term.

Generally, independent central banks enjoy both goal and instrument independence. In return to their independence, central bank are usually accountable at some level to government officials, either to the finance ministry or to parliament.

For example, the Board of Governors of the U.S. Federal Reserve are nominated by the President of the U.S. and confirmed by the Senate, publishes verbatim transcripts, and balance sheets are audited by the Government Accountability Office. In the 2000s there has been a trend towards increasing the independence of central banks as a way of improving long-term economic performance.

While a large volume of economic research has been done to define the relationship between central bank independence and economic performance, the results are ambiguous. The literature on central bank independence has defined a cumulative and complementary number of aspects:

Institutional independence
The independence of the central bank is enshrined in law and shields central bank from political interference. In general terms, institutional independence means that politicians should refrain to seek to influence monetary policy decisions, while symmetrically central banks should also avoid influencing government politics.

Goal independence
The central bank has the right to set its own policy goals, whether inflation targeting, control of the money supply, or maintaining a fixed exchange rate. While this type of independence is more common, many central banks prefer to announce their policy goals in partnership with the appropriate government departments. This increases the transparency of the policy setting process and thereby increases the credibility of the goals chosen by providing assurance that they will not be changed without notice. In addition, the setting of common goals by the central bank and the government helps to avoid situations where monetary and fiscal policy are in conflict; a policy combination that is clearly sub-optimal.

Functional & operational independence
The central bank has the independence to determine the best way of achieving its policy goals, including the types of instruments used and the timing of their use. To achieve its mandate, the central bank has the authority to run its own operations (appointing staff, setting budgets, and so on.) and to organise its internal structures without excessive involvement of the government. This is the most common form of central bank independence. The granting of independence to the Bank of England in 1997 was, in fact, the granting of operational independence; the inflation target continued to be announced in the Chancellor’s annual budget speech to Parliament.

Personal independence
The other forms of independence are not possible unless central bank heads have a high security of tenure. In practice, this means that governors should hold long mandates (at least longer than the electoral cycle) and a certain degree of legal immunity. One of the most common statistical indicators used in the literature as a proxy for central bank independence is the “turn-over-rate” of central bank governors. If a government is in the habit of appointing and replacing the governor frequently, it clearly has the capacity to micro-manage the central bank through its choice of governors.
Financial independence
Central banks have full autonomy on their budget, and some are even prohibited from financing governments. This is meant to remove incentives from politicians to influence central banks.

Legal independence
Some central banks have their own legal personality, which allows them to ratify international agreements without government’s approval (like the ECB) and to go in court. There is very strong consensus among economists that an independent central bank can run a more credible monetary policy, making market expectations more responsive to signals from the central bank. Both the Bank of England (1997) and the European Central Bank have been made independent and follow a set of published inflation targets so that markets know what to expect. Even the People’s Bank of China has been accorded great latitude, though in China the official role of the bank remains that of a national bank rather than a central bank, underlined by the official refusal to “unpeg” the yuan or to revalue it “under pressure”. The People’s Bank of China’s independence can thus be read more as independence from the US, which rules the financial markets, rather than from the Communist Party of China which rules the country. The fact that the Communist Party is not elected also relieves the pressure to please people, increasing its independence.
Stick with me and with The Standard for Part 9.

https://standard.gm/country-focus-the-gambiare-the-financial-economic-and-other-ramifications-of-printing-new-currency-and-minting-new-coins-part-8/
3   L A T E S T    R E P L I E S    (Newest First)
toubab1020 Posted - 07 Aug 2019 : 19:55:52
I found this article,what the author fails to grasp (In my opinion ) is that firstly and most importantly it's about MONEY and the value therof ,which EVERYBODY knows is in the control of politicians,the fact that Gambia has maintained the Dalasi for very many years whereas many other countries in Africa have decided to make changes which choice has sometimes been a bad call.
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By
Madi M.K. Ceesay -
July 3, 2019
The ECOWAS heads of State has just concluded their 55th meeting in Abuja Nigeria where they have taken a strong decision of coming up with a single currency come 2020; where then is the rationale for the Gambia to print a new currency note?
“Beginning in January 2020, countries within the West African sub-region will be able to use a single currency called ECO.

The currency was adopted by the Authority of ECOWAS Heads of State and Government on Saturday in Nigeria’s capital Abuja.

The West African leaders endorsed the currency at their 55th Ordinary Session and approved a road map towards the currency’s issuance in January 2020.

There was a roadmap to ensure that all member countries meet three primary criteria for the adoption of the currency.
Printing a new currency will definitely cost the tax payers lot of thousands if not millions of dalasi. If that is the case is it wise to go ahead with the printing of our new currency next month.
The government of the Gambia is part of the said agreement where we were represented by no other person but a whole President of the state Adama Barrow.
The ECOWAS Chairman President Issoufou Mahamadou has said that the revised roadmap does not affect the date for the issuance of the single currency in January 2020.”

Speaking about the deadline for adoption Mahamadou said “We have not changed that but we will continue with assessment between now and then.

“We are of the view that countries that are ready will launch the single currency and countries that are not yet ready will join the programme as they comply with all six convergence criteria.”

ECOWAS has a combined population of 385 million and was set up in 1975.

It comprises Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

Eight of these countries use one currency called the CFA franc. Those are Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.

The current decision to adopt one currency is similar to the move made by the European Union to adopt the single currency called Euro.

Since all is set for a unified currency to use by ECOWAS and that includes the Gambia why do we have to print a new currency at this eleventh hours if not to waste state money.
The ministry of Finance should consult the Central Bank on this issue so that the position change; otherwise we will just be wasting our scare resources. This government has always being blaming the poor economy on the previius government. Therefore it will only be in the interest our adjusting to the realities by maintain the old currency for the period of the transition from the old currency to the Eco.

http://dailynewsgm.com/should-gambia-print-any-new-currency-notes/
toubab1020 Posted - 07 Aug 2019 : 18:36:20
The Standard webpage also has some pictures of the new notes.

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Alagie Manneh August 7, 2019

The Gambia yesterday released new banknotes into the economy through commercial banks.

The main feature of the new notes is the absence of the portrait of former dictator Yahya Jammeh. Jammeh’s image has been replaced by an imageof a bird.

Public opinion greatly pushed the country’s apex bank to come up with new notes, following clamouring calls for the former president’s face to be removed from the nation’s currency, Karamo Jawara, director of banking, said ealier this year.

Officials further said the notes are equipped with high security features and they include 5, 10, 20, 50, 100 and 200 dalasi.

Central Bank governor Bakary Jammeh said: “The currencies that [Jammeh] has his heads on were printed in 2015 and if you check currencies in circulation from 2014 to 2015, there are those that do not have his head.

“So we can print those 2014 ones on which he does not have his head and get delivery in February (2018),” he told journalists at the time.

“So [Jammeh’s] face is gradually phasing out because notes that come in here do not go out again. And the new stock we will print will take us the whole of 2018 without his head.

“Then we can have time to redesign the entire currency with new security features… We are thinking of standards such as the current bank notes of countries like South Africa and Ghana,” he added.

Many also called out Jammeh’s hypocrisy, after he criticised his predecessor Sir Dawda Jawara, for printing notes with his face on it.

https://standard.gm/gambia-releases-new-banknotes-without-jammehs-portrait/
toubab1020 Posted - 07 Aug 2019 : 17:23:11
August 6, 2019
RELATED TOPIC:
https://www.gambia.dk/forums/topic.asp?TOPIC_ID=16493

The Governor of the Central of the Gambia confirms circulation of the new banknotes into the economy to begin on August 6th 2019.

According to a press release from Statehouse on Monday 5th August 2019, the Governor of the Central Bank of The Gambia presented samples of the country’s new banknotes to President Adama Barrow at the State House.

Speaking to the State House media corps after the meeting with the president, the Governor of the Central Bank, Mr. Bakary Jammeh explained the structure through which the new notes will be released to the public.

“Issuing the money into the economy means it is done through the commercial banks who maintain deposits with us. As it is the Tobaski season, there is a high demand for cash. So, when banks come for their money at the Central Bank, we issue them with the new notes,” said Mr. Jammeh.

The President was informed that the Central Bank will maintain the old currencies in circulation side by side with the new notes until further notice.

In May 2019, the Central Bank of The Gambia unveiled a new family of notes, including the D200 denomination. All of the redesigned banknotes containing the image of ex-president Jammeh will be replaced.

https://foroyaa.gm/new-banknotes-to-begin-circulation-today/

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