The Central Bank of Liberia (CBL) has announced that, in keeping with its statutory mandate to ensure the integrity of the Liberian Dollar (LRD) is maintained, the CBL will shortly introduce a new series of banknotes into the Liberian economy, notable among them, a new bill in the L$500 denomination.
According to the CBL, though the existing denominations maintain their respective portraits, the Bank has reinforced the security features in the new series, which are both visible and invisible. The newly introduced denomination of L$500 (Five Hundred Liberian Dollar) denomination contains portraits of ordinary Liberians on the front, and Liberian wildlife on the back. CBL has ensured that the new series is printed on a higher quality substrate to guarantee longevity and reduce porosity.
In 2000, the CBL introduced the new Liberian dollar banknotes as a unified currency to replace the old “J.J. Roberts” banknotes. Since its introduction, the Liberian banknotes have undergone minor technical redesign and security feature enhancements.
The statement also said that the new development is geared towards maintaining public confidence and at the same time deterring fraud and counterfeiting. The newly printed currency features 3 levels of security to guard against fraud and counterfeiting.
The level 1 security features which can easily be recognized by the public, such as the new look and feel of the banknotes. The second and third levels are meant for the Commercial Banks, Professionals, Banknote Processing Machine (BPS), and the Central Bank.
In addition to preventing fraud and counterfeiting, the CBL also takes keen interest in tackling the two major risk issues associated with banknotes’ lifespan, namely: soiling and porosity.
Although the CBL’s announcement addresses to some extent the need to print new currency, it has long remained tightlipped on some of the more compelling questions, such as whether the banknotes being printed would simply replace and decommission what is in circulation; and if not necessarily, then what is the total value of the new banknotes?
Of even greater concern might be the implication of introducing the new L$500 denomination on the economy. Many fear that higher denomination banknotes could drive inflation of commodity prices and cause a devaluation of the very currency.
Experts suggest that higher currency denominations tend to facilitate money-laundering and hoarding of cash, while encouraging attempts at counterfeiting. In addition, the higher denominations require sufficient smaller denominations to use as change in order to facilitate everyday transactions.
The CBL has lain to rest a number of these concerns, especially those regarding fraud and counterfeiting. It has also announced that the new banknotes will be fully on par with the existing Liberian dollar banknotes as legal tender for all transactions.
On the positive side, larger denomination banknotes cost far less to produce than smaller denominations, and therefore reap significant savings for the government.
To assist with what is anticipated to be frequently asked questions (FAQs) about the new series of banknotes that will be issued soon, an FAQ sheet is also being issued to assist all stakeholders in clarifying any questions regarding the new banknotes.
The new series of banknote will be used along with the old series currently in circulation until otherwise.