Market beat: The Dalasi update

Good Morning Gambia and welcome to the  Dalasi Update.  

This week we have some very interesting facts and figures for you with regards the Dalasi as we buy and sell in all our commercial banks. The good news is  that all banks registered almost all gains in all currencies at the market  this week and this is a good signal for 2009 and I do hope it will continue.

The financial market overview
In economics and financial terms we are an emerging market as with most countries in the sub region and in almost all of the  Third World. Due to our size and financial clout as a nation and in most Africa at large there is low economic activities as per regards the buying and selling of shares and the hourly, minute by minute or even second by second updates of financial data.

In a nutshell, as an economy we do not have a stock market which is also true of most of our neighbours.In our sub region we have one at Ivory Coast, Ghana and Nigeria and in South Africa. .However, this should not prevent us or stifle our progressive financial wheeling and dealing in shares and forecasting of exchange rates and currency trading respectively. In so doing we as a nation and a people must start somewhere and move on and in the not too distant future. we in the Gambia may also run our own stock market where we buy and sell shares and where the currency is revisited on a minute by minute basis for trading and making of gains and losses.

In trying to give the financial public so lead as to what is happening in our local currency markets we try to analyse the buying and selling of foreign currencies in our respective commercial banks and bureau of exchange. I must state here that we rely on the Central Bank of The Gambia, which is the bankers’ banks for some information especially the indicative exchange rates which is subjected to change by the various banks but figures we must rely on as reference point for our analyses.

The central Bank over the years has undergone tremendous development and reaffirmed the populace’s faith and trust in our Dalasi by regulating and controlling our finance sector and they deserve a pat on the back.

Nitty gritties of the Dalasi  update

Mission
To furnish Gambians and the international community of the indicative rates within our commercial banks each week as we buy and sell foreign currencies with the help of the Central Bank of The Gambia.

How we do it?
Compare and contrast  on a weekly basis the indicative rate as supplied by the Central Bank in respect of each of our ten operational banks in the country. These figures vary and are subjected to changes by the respective banks a decision that is their own and there are no legislature baring them from making a gain in currency trading if they can buy and sell at different rates different from the indicative rates supplied to the Central Bank.

However, what these indicative rates do is to give us a glimpse into what is likely to happen in these banks and there by helping us to help you in making a decision as to where to knock for you foreign currency needs. We try to analyse last week’s figures against this week’s figure to reveal where the variances lie and whether it is a gain, loss or non mover and its implication to the economy. We are grateful to the Central Bank for having got the trading in foreign currencies under control and thereby stabilizing the Dalasi and the commodity markets.

We would urge the Central bank to look at the interest rates levied on loan products, the implementation and introduction of the Credit Regulatory Body, the Introduction of Credit Reference Bureau, to name but a few. Remember the road to national development is ushered faster by debates, researches and consultations especially at a time when we are witnessing an unprecedented mushrooming of numerous banks on our shores. It is only fitting and prudent to institute and take some caution and stringent regulations as businessmen and investors are very smart and clever so be aware before you  fall in the Continent Bank pit, once upon a time.

If we as Gambians we should pay more to a particular bank for Pound Sterling or US Dollars then that is a loss. In deed, that is a loss as we will need more money to meet up for our imports, our ACCA,CAT,AAT registrations, remittances to our families living abroad, Hajj packages and payments in relation to all other foreign commitments.

When a particular bank is poised to buy for instance the US Dollar at more than it bought it last week then that is bad for the Economy of The Gambia because that translates to the fact that we will be expected to pay more for food, fuel and all imported food stuff and non food items into the country because the importer relies on the banks for his/her foreign currency needs to foot he bill of the imports.

Whatever cost incurred by these importers will be passed unto us as final consumers so the story goes the less we buy and sell foreign currencies in The Gambia the better we are and the economy but the opposite is dire for us and the economy too.

In the same vein, if a particular bank is buying at less than it bought last week then it is making a gain in that particular currency or currencies. This is the ideal position for us as consumers of foreign currencies and a nation at large. The less Dalasi we spend to get the needed amount of foreign currencies the better for our economy and people. When banks buy and sell at less then it is a gain to us and the economy and if they buy and sell at more than reported previously then that is bad for us collectively.

This will mean we will have to pay more for goods ands services which are also bad for the Gambian economy. We encourage banks and financial institutions to buy and sell foreign currencies at less than reported previously if the factors responsible are controllable and if we do not get that then we are losing and therein making a loss.

In the currency table analysis there is also the non mover category where by a particular bank trades this week last week’s figures meaning it has not made a gain or loss in its currency trading. This is not  a bad position to be in as if we are not able to buy and sell at less ,then it is better to buy and sell at the same price than buy and sell at more. Sometimes, conditions and factors beyond the control of the respective banks might come into play which is understandable but regrettable because nothing could be done about factors that are external.

I must confessed I am a believer that the markets should be left alone to regulate themselves but when and where necessary we need legislations and government intervention to curb and control some unwanted profiteering and other evil practices to cripple the masses and the economy. This is the non mover category which Bank PHB and TBL has been very good at and is better to be in this category than making losses.

Non movers
FIB is 100% non mover this week on all its currencies at trading this week. TBL trades this week with last week’s figures in all its currencies. BANK PHB is also joins TBL in this category and it is a non mover in all currencies and exceptionally made a gain on the Pound Sterling.

Gains
SCBG did register all gains in all its currencies this week except on the Japanese Yen where it surrendered some minor losses as per last week trading figures. AGIB also registered all gains in all currencies at trading this week except on the South African Rand where it is a non mover and a loss on the Swedish Kroner .

GTB also proudly stood tall with gain in all currencies it trades on except on the Swiss Kroner and the Swedish Kroner where it registered non movers respectively. ICBG, ECOBANK, BSIC and ACCESS all registered all gains in all currencies except in one or two currencies with non mover and a loss. Generally, all banks registered impressive trading figure this week a momentum I hope they will strive harder to maintain with regards to factors under their control in currency trading.

Comments and contributions to this column please email me at moacamera@yahoo.co.uk.