Milton A. Weeks, Executive Governor of the Central Bank of Liberia (CBL), last Thursday justified the removal and shutting down of illegal moneychangers from the streets of Monrovia and its environs.
Speaking to the Daily Observer last Thursday, he said their removal is based on several reasons, among them structural issues that they have been talking about as financial regulators.
He said if demand outstrips supply, the amount of currency CBL puts on the market is the one government will earn, adding: “We don’t manufacture money at CBL; what we do is to get foreign currency from government and that’s what we sell.”
Governor Weeks continues: “If the government is not really making a lot from foreign exchange we will not have it to sell.
“If there is not enough forex to sell, there will be more pressure and the rate will depreciate; so that is the classic, simple reasons that we are having depreciation.”
One of the reasons for shutting down illegal moneychangers, according to him, is to protect those that have registered as legal forex bureaus.
“If we even took all of them from the street, it will not guarantee us that the rate will not depreciate. Our concern is that there were lots of illegal transactions and because of that they are negatively impacting people who go and spend money to register their bureaus,” Governor Weeks added.
He further advised moneychangers that to be a legal transactor they need to be fully registered.
“That’s why we took that step to move them off the streets and encourage them to register,” Weeks added.
It may be recalled that the CBL observed with serious concern the re-emergence of illegal foreign exchange operators in the country, in violation of the Central Bank of Liberia Act of 1999, the New Financial Institutions Act of 1999 and the regulation concerning the licensing and supervision of foreign exchange bureaus in Liberia.
Reinforce local content
Meanwhile, the CBL Governor used the occasion to call on other government officials to re-enforce the Local Content policy in the country.
He said if such policy is enforced, it will create market opportunities for Liberian goods and services and also help address human capital formation in the labor sector.
“We need to provide opportunities to move people out of poverty into middle class to have disposable cash to make investments,” he said.