(Bloomberg) -- Senegal has been removed from a global dirty-money list after three years, a move likely to boost investor confidence after a spate of negative news led to a selloff of its eurobonds this month.
The Paris-based Financial Action Task Force on Friday removed the West African nation from its so-called gray list for increased monitoring after it fortified its mechanisms for tackling money laundering and terrorist financing, Senegal’s Finance Ministry said. Bloomberg last week reported that FATF was poised to remove the nation from its list.
The move should assure investors of “a safer, more stable” financial system, the ministry said. It may also improve capital flows, which International Monetary Fund research has shown reduces after a country is gray-listed.
Since Senegal joined the list in 2021, the government has strengthened its targeted financial sanctions regime and put in place regulations on the nature of financing. In February, its parliament adopted a bill against money laundering and the financing of terrorism. The step is seen as reinforcing law enforcement capacities and awareness of money laundering crimes, FATF said in a statement Friday. Now any financial institution that doesn’t respect these rules may be subject to administrative or criminal sanctions.
Senegal’s eurobonds have been among the worst performers in emerging markets this month after the IMF said it’s weighing the impact of underreported financial data on the country’s $1.5 billion program with the Washington-based lender, and S&P Global Ratings changed its credit outlook to negative from stable.
Dollar bonds due 2048 declined by 0.2 cent to 72.63 cents on the dollar at 4:07 p.m. in London. Notes due 2033 lost 0.1 cent to 84.66 cents on the dollar.
An audit instituted by newly elected President Bassirou Diomaye Faye and another by the IMF showed the West African country’s public debt and fiscal deficit were higher than previously reported.
--With assistance from Moses Mozart Dzawu.
(Adds ministry, FATF comment in second and third graph, dollar bond move in sixth graph)
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