SLL - Sierra Leonean Leone

History of the Sierra Leonean Leone (SLL)

On August 4, 1964, Sierra Leone officially introduced the Sierra Leonean Leone, replacing the British West African Pound. The exchange rate at the time was 1 pound = 2 leones, meaning each leone was valued at half a pound. Initially, the Leone held significant value, with 1 leone equivalent to approximately 1.40 USD, making it stronger than the USD at that time.

Since its introduction, the Leone has been both a symbol of economic independence and a witness to the challenges Sierra Leone has faced. However, during the 1980s, the country's economy encountered major difficulties, and the Leone began to depreciate. Inflation surged, and by the late 1980s and early 1990s, the Leone's value against the USD had dropped significantly.

The Redenomination of the Sierra Leonean Leone – From SLL to SLE

The process of redenominating the Leone began in 2021 when the Sierra Leonean government announced the introduction of a new version of the Leone (SLE), replacing the old Leone (SLL). This decision was made to improve the country's economic situation, particularly as inflation had been persistent for years and the value of the old currency had significantly depreciated. The exchange rate for the redenomination was set at 1000 SLL = 1 SLE, meaning the old Leone had lost so much value that it needed to be replaced to stabilize the economy.

With this redenomination, the SLE was officially launched on July 1, 2022. The old SLL notes remained legal tender until December 31, 2023, and could be exchanged for the new Leone until March 31, 2024. This was a crucial step to help Sierra Leone’s economy recover and establish a more stable monetary foundation for the future.

Sierra Leonean Leone coins

The Sierra Leonean Leone, both SLL and SLE, is divided into 100 cents, similar to the currencies of many other countries. The initial coins of the SLL were issued in 1964 with denominations of 1/2 cent, 1 cent, 5 cents, 10 cents, and 20 cents. These coins typically featured important historical figures, such as Sir Milton Margai, Sierra Leone’s first Prime Minister.

In 1972, the 50-cent coin was introduced, featuring the image of the first President, Dr. Siaka Stevens. This was followed by the issuance of the 1 Leone coin in 1974, and in 1976, the 2 Leone coin was introduced to commemorate FAO Day (the United Nations Food and Agriculture Organization). However, due to the difficult economic conditions and inflation, these coins became less common and were frequently replaced by higher denominations.

In 1980, a new series of coins was issued, ranging from 1/2 cent to 20 cents, made from more durable metals. But due to a shortage of metal and the rise of counterfeit coins, the use of metal currency diminished and became less frequent in daily transactions.

Sierra Leonean Leone banknotes

The first banknotes of the Leone were issued in denominations of 1, 2, 5, 10, 20, 50, 100, 500, 1,000, 5,000, and 10,000 leones. These early banknotes had a simple design but held special significance, featuring prominent scenes from Sierra Leone such as the Cottonwood Tree, Riverbed Landscapes, and Village Markets. These banknotes reflected the country's economy and society in the 1960s and 1970s.

However, higher denominations such as the 10,000 leones were not commonly used and were mostly seen in large transactions. The 10,000 leones banknote had a high value and was rarely used in the daily lives of citizens, making lower denominations like the 1,000 and 5,000 leones more frequently used.

By June 2010, the Bank of Sierra Leone issued a new series of smaller and more secure banknotes. The denominations in this release included 1,000, 2,000, 5,000, and 10,000 leones.

With the growth of technology and the shift towards a digital economy, Sierra Leone has also begun to look towards the future of the Sierra Leonean Leone in the digital world. One emerging trend in the Sierra Leonean economy is the development of cryptocurrency, which is expected to gradually replace cash in the future. However, this transition is still slow, and cash remains widely used in daily transactions.

Floating Exchange Rate of the Sierra Leonean Leone

The Central Bank of Sierra Leone implements a floating exchange rate policy, where the value of the Leone is adjusted based on supply and demand in the market. This policy is based on a basket of currencies from countries with trade, financial, and investment ties to Sierra Leone. The main goal is to maintain relative stability in the exchange rate, thereby controlling inflation, promoting economic growth, improving the balance of payments, and increasing foreign exchange reserves.

History of the Sierra Leonean Leone Exchange Rate

The exchange rate history of the Sierra Leonean Leone against the USD has seen significant fluctuations, reflecting the economic and political challenges faced by Sierra Leone:

• 1980s: The Leone began to experience severe depreciation due to major economic crises. The exchange rate surged dramatically, with 1 USD being exchanged for thousands of Leones.

• 2000s: Sierra Leone's economy was heavily impacted by the financial crisis and high inflation. As a result, the Leone continued to lose value, with the exchange rate surpassing 1 USD = 3,000 SLL.

• 2010–2020: Dependence on mineral exports and uncontrolled inflation led to further depreciation of the SLL/USD exchange rate. In 2015, the rate reached about 1 USD = 5,000 SLL, and it continued to escalate, reaching as high as 1 USD = 23,000 SLL by 2024.

These fluctuations reflect the economic challenges Sierra Leone has faced, requiring stronger measures to control inflation and stabilize the currency.