Illegal Forex Dealers, Others Responsible for Rise in Exchange Rate

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The Assistant Secretary General of the National Foreign Exchange Bureau of Liberia (NAFIBOL), Nimely Saye, has attributed the rise of the exchange rate to unlicensed owners of foreign exchange (forex) bureaus and those operating on street corners.

Mr. Saye also blamed owners of gas stations, cement depots, and stores who are clandestinely involved in the forex business, and not charging their customers the CBL rate.

Mr. Saye made the remarks yesterday in an exclusive interview with the Daily Observer at his forex bureau on Broad Street, when he described the situation as a serious embarrassment for “legal foreign exchangers in the country.”

He said “These people operate out of the confines of the regulations that are put in place by the Central Bank of Liberia (CBL); and as such, they do whatsoever pleases them, although some of their actions constrain the overall economy, evidenced by what the country is currently going through.”

Saye, who has over ten years of experience in the forex business, said there is a need for the CBL to take serious actions against illegal forex businesses to control the exchange rate in Liberia.

“We have some big business people who are getting the United States dollars from the CBL to purchase goods but selling it to other businesses in order to make maximum profit. These people even put people in the street to get US dollars for them, because they have sold the US dollars provided to them by the bank,” Saye said.

“Licensed businesses are changing for L$106 for US$1 and need to pay taxes, including CBL fees, while at the same time unlicensed businesses are also changing at the same rate and not paying taxes, or even renting places. Licensed bureaus have to pay rent and workers as well.”

He said any attempt by the CBL to relent on arresting the situation will lead to a serious rise of the US dollar on the Liberian market, adding that “CBL is doing well but need to reinforce their strategies and communicate more to registered bureaus.”

“Legal businesses go by the CBL rate but those illegal ‘forexers,’ cement depots and gas stations don’t go by the CBL rate, which is causing problems now for the economy. Licensed businesses are expecting the rate to increase from what it is today L$106/107 for US$1to even L$110, 115 and above,” Mr. Saye said.

He noted that the CBL’s auction or ‘special window’ for licensed forex bureaus, which is usually meant to drop the rate, cannot help to control the rise of the rate in the wake of the many illegal forex bureaus.

Mr. Saye said his organization is currently working with the CBL to establish more bureaus around the country to ensure that illegal ‘forexers’ are incorporated or licensed.

In other countries, he said, “The rate goes up high but it is stable, as forex bureaus will operate on one rate. You will not see someone changing for L$100 for US$1 and others changing for L$102. Owners of stores even contact bureaus to provide them with huge sums of US dollars, sometime at the end of the month or a sale, to get goods.”

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