The Central Bank of Liberia (CBL) has observed with concern that some foreign exchange dealers and users have recently been in the practice of arbitrarily increasing the exchange rate between the Liberian dollar and US dollar by significantly increasing the spread between the buying and selling rates.
The CBL takes this opportunity to reconfirm its policy on the L$1 spread between the buying and selling rates. While the CBL is currently reviewing this spread to determine if there is a need to amend it, until the review is completed, the spread remains L$1, the Central Bank said in a press release yesterday.
Given the current level of volatility that is being observed in the foreign exchange market, the CBL intends to continue to intervene in the market through its Foreign Exchange Auction Window, to smooth-out volatility.
However, in its interventions in the market, the CBL will give priority to key sectors of the economy and will encourage the use of foreign exchange primarily for essential imports.
The CBL also calls upon market players to avoid speculation and profiteering when dealing in the foreign exchange market. The market fundamentals do not support this recent surge in the Liberian dollar exchange rate.
The CBL said it intends to use all instruments available at its disposal to ensure that its interventions in the market have the desired impact of smoothening out the volatility in the exchange rate. Counting on the full cooperation and support of all, the Bank said interventions will include sanctions on offenders who are identified.