CBL: In-bound Money Transfers to be Paid in Dual Currency


A new regulation issued by the Central Bank of Liberia (CBL) will require inward personal remittances received via money transfer institutions from abroad to be dispensed in dual currency. Under the regulation, payments of money transferred or money sent from abroad to a recipient in Liberia will now be made partly in Liberian Dollars (LRD) and partly in United States Dollars (USD).

The regulation (No. CBL/RSD/004/2016) will apply to all licensed financial institutions engaged in money transfer services, including Western Union, MoneyGram, Ria and similar services operating in the country.

The regulation, however, will not apply to inbound money transfers credited directly into recipients’ accounts at commercial banks (e.g. SWIFT transfers). The new regulation comes into effect as of December 1, 2016.

Accordingly, recipients of money transfers sent from abroad will be paid 25-percent in Liberian Dollars and 75-percent in United States Dollars, the CBL said in a statement issued yesterday.

The Liberian dollars payment will be made at the CBL published selling exchange rate prevailing on the date of the payment of the transfer to the recipient. The exchange rate shall be conspicuously displayed on the premises of the financial institutions or paying agents of the financial institutions.

Every Dollar Counts

The new CBL regulation could see a shift in the use of financial services depending on the cost of sending money to recipients in Liberia. Many Liberians still receive remittances from abroad via non-bank services such as Western Union or MoneyGram. While these services offer instant transfer of cash, recipients will soon realize that the exchange rate for the LRD portion of the remittance, being disbursed at the prevailing CBL rate, would need to be slightly augmented to meet real market rates. Many forex vendors exchange LRD to USD at the rate of between 103 and 105 LRD per USD (CBL: 101), while the reverse (USD to LRD) is exchanged at the rate of between 99 and 100 (CBL: 100).

That being said, some customers or benefactors abroad wishing to send USD to Liberia might want to consider having their beneficiaries receive remittances through a USD account at a local bank. This is called a SWIFT transfer or Electronic Funds Transfer (EFT). The benefit for those sending remittances is that the cost of sending EFT is usually a flat fee at the bank (in the US, it could cost 40-50USD to send EFT of any amount). Therefore, for certain amounts and above, it would be cheaper to send via EFT (each bank has its own rates). For those on the receiving end, the entire remittance would be made in USD.

The downside of EFT, however, would be that the funds transfer is not as instantaneous as MoneyGram and Western Union. It usually takes two or more days for EFT to reach a Liberian bank account from abroad.

So, while MoneyGram and Western Union might be more expensive for larger amounts, customers who use these platforms are really paying for speed. It does however cost less to send smaller amounts of money this way.

The CBL regulation is part of a strategy to curb inflation caused by severe declines in Liberia’s chief foreign exchange earners such as iron ore and rubber exports. Those receiving remittances from abroad may very well begin to consider the use of a bank account depending on the volume they receive, to avoid the hassle of navigating the foreign exchange market upon receipt of said remittance, because every dollar counts.


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