It is now been observed that the exchange rate between the U.S. dollar and the Liberian dollar has started to decrease, having hit what some people termed as the ceiling. Last week, the rate had reached L$90 to US$1 and as it climbed that was how the prices of basic commodities, including gasoline, also skyrocketed, leaving the ordinary man to feel the pinch.
With this new development, one would expect that as it was when the rate was going up and the prices of things simultaneously climbed, too, so they are also expecting it to be this way as the exchange rate has began to drop.
However, this is not the case as it stands. The rate has dropped L$85 to US$1 but the prices of things remain constant as yet when the rate reached L$90.
Up to Wednesday, May 21, our Business & Economic reporter observed during a routine tour of several business centers in Monrovia that despite the decreasing of the exchange rate, prices on the local market including petroleum products were yet to come down as well as transportation fare.
It is glaring that ordinary Liberians, especially the unemployed are not happy with how the country’s economy is being handled by the present government. While most described this government as being ‘insensitive’ to their plight, others have jumped to the defense of the government, by saying that the government can’t fully exercise control over the exchange rate as the money market is about supply and demand and if the government attempts to set the rate, it would lead to black market.
Liberians spoke with the Daily Observer about rise and decrease of the exchange rate and its impact on the cost of living.
“Today, the explanation for price hikes for commodities in the market is the rise of the foreign exchange rate,” Moses Peters, a shopkeeper on Benson Street, who also noted, “No marketer will bring their prices down, because of the new rate is yet not stable. It might still go up or down.”
However, Emmanuel Karngar, a foreign exchange trader, expressed optimism that the situation will improve, and called on the Central Bank of Liberia (CBL) and the Ministries of Finance and Commerce and Industry to continue coordinating their respective roles so as to set the economy.
In another interview, Kebbeh Flomo—a lappa seller at the Duala Market maintained that the prices of her goods will not be reduced because, according to her, the buying rate of the US$ to the L$ is “too high.”
She stated that she buys US$1 for L$90.