Developments in the banking sector of Liberia at the end of September 2014, showed a significant decline as a result of the Ebola Virus Disease (EVD), which has caused a slowdown in normal economic activities during the quarter. For the period under review, total assets, loans and advances, total capital and deposits as compared to the second quarter of the year.
However, the industry’s Capital Adequacy Ratio (CAR) remained strong despite the impact of the Ebola virus.
The interest rate on lending and time deposits declined while interest rates on personal loan and mortgage increased and rate on savings and certificate of deposits (CD) remained unchanged.
According to the Central Bank of Liberia (CBL) Financial and Economic Bulletin of July and September, 2014, the average Liberian dollar exchange rate appreciated by 5.3 percent at the end of September compared with the previous quarter. “This was occasioned by the foreign exchanged intervention the CBL,” the report further averred.
The report, according to CBL indicated that the fiscal operations for the Government of Liberia (GOL) at the end of September, 2014, resulted to a surplus of L$678.2 million (0.4 percent of Gross Domestic Product), down from a surplus of L$2,186.2 million (1.3 percent of GDP) in the previous quarter.
However, receipts from actual revenue and grants for the review quarter fell below budgetary target by L$360.5 million while the public debt stock of Liberia rose to US$694.8 million (33.2 percent of GDP) at the end of September, 2014 from US$648.2 million (31.0 percent of GDP) to the end of June, 2014.
The overall provisional balance of payments (BOP) position deteriorated at end-September, 2014, recording a deficit of US$38.2 million largely driven by the widening of the country’s current account deficit.
There was a further decline in the current account balance by 13.2 percent compared to the previous quarter and total merchandise export earnings plummeted (fell) by 13.6 percent to US$145.8 million at end-September, 2014, from US$168.8 million at the end of June.
Iron ore export receipts fell by 10.0 percent to US$100.3 million at the end of the period under review, from US$111.5 million at the end of June.
Similarly, rubber export receipts declined by 10.9 percent to US$22.0 million at the end of the review quarter, from US$24.7 million at the end of the preceding quarter.
The decline in rubber and iron ore receipts were driven by both domestic and external factors. On the domestic front, the ongoing EVD crisis greatly affected iron ore production and export during the quarter with export volume declining by 31.8 percent to 1,109,246.0 metric tons at the end of the quarter, from 1,626,157 metric tons at end-June, 2014.
On the external front, increasing iron ore and rubber supply on the global market in the face of weakening consumption demand across major markets (mainly China and the Eurozone) continues to drive the downward spiral in iron ore and rubber prices.
The quarter of CBL said the average quarterly iron ore price fell by 12.0 percent to US$90.3 per metric ton for the quarter ended, 2014 from US$102.6 for the preceding quarter; compared with the level at end-September, 2013, average quarterly iron ore price by 32.0 percent at end of the quarter under review.
Average quarterly rubber price declined by 13.0 percent to US$1,837.7 per metric ton at the end of the quarter, from US$2, 18.3 recorded at end-June.
Year-on year, rubber price fell by 29.0 percent, despite the fall in iron ore and rubber export receipts during the quarter, the iron ore-rubber led enclave sector continued its dominance in Liberia’s export base, with the two primary export commodities accounting for 85.5 percent of total export receipts at the end of the quarter, from 80.7 percent in June, 2014.
The total export receipts rose by 29.8 percent at end-September, 2014 compared with the corresponding quarter in 2013, driven largely by increase in iron ore export earnings.
Despite the persistent decline in iron ore price and constraints posed by the ongoing EVD crisis, iron ore export earnings rose by 61.5 percent year-on-year mainly due to increase in export volume from drawdown on inventory in consideration of further decline in prices and the fear of a prolonged EVD crisis.
Largely on account of the Ebola epidemic that peaked during the quarter, mineral (diamond and gold) and round logs export earnings underperformed the levels recorded in the preceding quarter, with total gold and diamond export earnings declining by 41.8 percent to US$8.5 million, from US$14.6 million at end-June, 2014.
Meanwhile, round logs export receipts fell by 17.1 percent to US$6.3 million at end-September, 2014, from US$7.6 million at end-June, largely explained by the EVD crisis and the rainy seasons.
However, year-on-year, round logs export receipts surged by 31.3 percent, mainly occasioned by drawdown on inventories prices of the commodity.
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