Mousa Gibril Balla Gaye, secretary of state for Finance and Economic Affairs, has explained the improper, inconceivable and unimaginable greedy behaviours the commercial banks displayed and conducted foreign currency transactions during the recent months of the dalasis’s appreciation which he earlier described, during the budget speech as unprofessional, unethical and unwarranted.

Clarifying his statements before members of the National Assembly after been questioned by Honourable Sedia Jatta, NAM for Wuli West to explain what the improper behaviour was and what has been done to combat it, SoS Gaye recalled that during the first half of 2007, the dalasis appreciate marginally against all major international currencies and between August and September, 2007, the dalasis showed an unprecedented level of appreciation, and by 30th October, 2007 the dalasis appreciated against the Us Dollar by 30.6 percent, the pound sterling by 23.0 percent, the Euro by 22.9 percent, and the CFA Franc by 16.2 percent.

According to him, this created panic among the foreign exchange dealers, especially the commercial banks as they experienced losses in their foreign currency exchange accounts.

He added that some of the commercial banks then began to hoard foreign denominated currencies, as well as further reduced their trade in foreign currencies.

“This created an artificial shortage of foreign currencies in the market, and therefore affected the exchange rate of the dalasis. It is this conduct that has been characterized as unprofessional, unethical, and unwarranted, because government operated a market-driven economy” he said.

He then indicated that following such acts, the secretary of state for finance and economic affairs had a meeting with all the commercial banks operating in the countrys and persuaded the commercial banks to allow the supply and demand of foreign currencies to determine the exchange rate of the dalasi.

“The Central Bank also instituted physical verification of returns on foreign currency holdings by commercial banks, and also instructed commercial banks to ship foreign currencies abroad only through the central bank” he said.