(U) KUDOS FOR REPORTING ON SIERRA LEONE CURRENCY

C O N F I D E N T I A L STATE 102966 NOFORN SIPDIS E.O. 12958: DECL: 10/02/2034 TAGS: PINR ECON SL SUBJECT: (U) KUDOS FOR REPORTING ON SIERRA LEONE CURRENCY (C-AL9-02044) REF: A. FREETOWN 000322 ¶B. FREETOWN 000321 ¶C. FREETOWN 000262 Classified By: MICHAEL P. OWENS, ACTING DIR, INR/OPS. REASON: 1.4(C). ¶1. (C/NF) WASHINGTON ANALYSTS GREATLY APPRECIATED POST'S REPORTING ON THE RECENT DECLINE IN THE VALUE OF THE SIERRA LEONE CURRENCY, AS REPORTED REFTELS (FREETOWN 000322, FREETOWN 000321, FREETOWN 000262). POST'S ANALYSIS IDENTIFIED THE CAUSE OF THE CURRENCY'S SLIDE, THE IMPACT OF THE GLOBAL ECONOMIC SLOWDOWN, AND THE POSSIBLE IMPACT THAT A FURTHER DEVALUATION COULD HAVE ON POLITICAL STABILITY. WE WOULD GREATLY APPRECIATE FURTHER REPORTING ON THE TOPIC, AS TIME AND RESOURCES ALLOW. IN PARTICULAR, WE ARE INTERESTED IN INDICATIONS THAT CURRENCY DEPRECIATION AND RELATED ECONOMIC HARDSHIPS COULD ERODE SIERRA LEONE'S FRAGILE POST-CONFLICT RECONSTRUCTION. FOR INSTANCE, HOW HAS THE POPULATION COPED WITH THE RISING PRICE OF IMPORTS? HAVE GOVERNMENT OFFICIALS PRESSED FOR WAGE INCREASES TO OFFSET DECLINING PURCHASING POWER? AT WHAT POINT COULD RISING FUEL AND FOOD PRICES TRIGGER UNREST? MANY THANKS. CLINTON