Historical Sketch

In the late 15th century, Portuguese navigators arrived at the Sierra Leone coast, which triggered the establishment of several European trade posts, mainly for slave trade. As no colonial interests were pursued the territory it was foreseen as a homestead for liberated slaves. The first repatriation to the "Province of Freedom" occurred in 1787 under supervision by the British Royal Navy. In 1792, the abolitionist Sierra Leone Company took over the administration creating the Sierra Leone colony in 1799. After the Company's default in 1807 the colony fell to the British Crown. The coastal hinterland was conquered during the 19th century and organized as Sierra Leone protectorate in 1896. In 1961, Sierra Leone attained independence, and the republic was proclaimed in 1971.

Monetary History Overview

When the Sierra Leone Company took over the administration of Sierra Leone the Sierra Leonean Dollar was created as unit of account equal to the main trade coin of the time, the Spanish Dollar. Initially, it was set equal to 60 Pence Sterling, which corresponded to the local rate for the Spanish Dollar but was 15% above the standard valuation. In 1795, this was corrected to 52 Pence Sterling. The first silver coin produced was 5% heavier than the Spanish Dollar, thus disappeared immediately from circulation and had to be replaced by a lighter one. In 1796, the Company also issued subsidiary coins and paper money. In 1807, the Sierra Leone Company defaulted, and the territory was taken over by the British Crown. The Company's paper money was demonetized in 1808. The silver coinage had already disappeared, the remaining copper coin was withdrawn in 1809. British accounting was introduced but the circulating medium consisted of foreign trade coins and French money that flew in from the neighbouring colonies. In 1880 finally, the foreign coins were demonetized. In June 1913, Great Britain created the West African Currency Board which issued a common currency for the four colonies of Gold Coast, Nigeria, Sierra Leone and Gambia. The West African Pound remained current during the colonial rule.

In 1961, Sierra Leone attained independence. In August 1964, the Bank of Sierra Leone began operations and issued the 1st Sierra Leonean Leone at half a West African Pound as national currency. It was pegged to the Pound Sterling and followed the 1967 devaluation and the 1972 floating of the British currency. In 1978, the Leone repegged to the IMF Special Drawing Rights (SDR) unit. After massive devaluations in the mid-1980s the exchange rate was floated in 1986. A year later, the 50% depreciation was annulled, and the Leone got reset to its pre-float value. Then followed a series of new devaluations that brought the Leone to 10% of the 1986 value. In the 1990s, the political situation deteriorated, and the civil war in neighbouring Liberia triggered warfare in Sierra Leone that subsequently devastated the country and ruined the economy. The Leone had been floated in mid-1990 and quickly depreciated. The decay continued beyond the end of the civil war in 2002, and the Leone's value stabilized somewhat at 5% of the pre-war rate only at the end of the 2000s. But this was of short duration only, during the second half of the 2010s, the Leone lost another 50% of its value. In July 2022, a currency redenomination was carried out. Three zeros were cut, and the2nd Sierra Leonean Leone became the new currency.

Sierra Leone joined the International Monetary Fund (IMF) on 10.09.1962.

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