CBL Releases L$2.7B to Commercial Banks,

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Governor Weeks:“We will continue to work with the fiscal authorities through the Liquidity Working Group and other such forum to collaboratively address the liquidity challenges."

…but liquidity crunch persists

Against the backdrop of rising public concern about the acute difficulty faced by  the public at large to access cash from remittances through Western Union and MoneyGram as well as from individual deposits, the Governor of the Central Bank of Liberia(CBL), Milton Weeks, has disclosed that the CBL has provided an amount of L$2. 7 billion roughly equivalent to US$21,259,842 to address the liquidity crunch. He says the amount, provided since last week is intended to contribute to economic growth and the livelihood of the banks’ clients.

Governor Weeks further disclosed that as far as he was concerned there are no pending requests from commercial banks. He attributed the liquidity problem to what he described as a slight delay in the currency management process at the bank. He said ‘getting reserve funds from operational vault to commercial banks’ was an operational issue that has been resolved, adding, “but for people to go the extent of saying that there is no money or cash in various commercial banks, that’s completely false”, he declared.

But contrary to Governor Weeks’ assertions that the liquidity problem has been eased, the Daily Observer continues to be flooded with reports from an anxious public that they are being turned away by banks with the explanation that the banks do not have any cash. They complain that aside from being unable to access money from deposits, they are also experiencing extreme difficulties receiving remittances from abroad through Western Union and MoneyGram.

A customer (name withheld) who spoke to the Daily Observer disclosed that he went to a local bank yesterday to withdraw an amount of 2,000 USD but was turned away by the bank for the same reasons — no money. Its banking hall, normally over crowded at this time of the year, was virtually empty and deserted.

It can be recalled that only last week the president of the Liberian Bankers Association, John Davies, during a presentation at an economic policy forum hosted by the Governance Commission attributed part of the problem to the lack of trust between the CBL and commercial banks. He stressed the need to restore trust to the sector wherein individuals can take a GOL contract to the bank for financing and expect fruitful results rather than the involuntary knee-jerk reaction”NEXT” to prospective clients seeking bank financing for projects,business ventures, etc.

Although Governor Weeks has disclosed that the glitch which caused interruptions to the release of currency to the banks has been overcome for over a week now, the effects of his pronouncements remain to be seen as the liquidity situation remains much the same with customers still being turned away for the lack of cash to meet their demands. Even the Daily Observer has been impacted by the severity of the problem and has been facing acute difficulty accessing cash from the banks to pay staff salaries and meet other operational expenses.

Meanwhile, Governor Weeks says “despite challenges, the economy is on the path of a rebound; however, exchange rate and inflationary pressures persist in the wake of elections uncertainties, continuous high demand for foreign exchange to facilitate imports, infrastructural challenges, and other external factors, especially continued low trending in global commodity prices.

“We will continue to work with the fiscal authorities through the Liquidity Working Group and other such forum to collaboratively address the liquidity challenges by identifying intervention strategies for positive impact”.

Authors

10 COMMENTS

  1. I believe the CBL should vehemently monitor the operations of Commercial Banks regularly by recommitting herself as the apex bank in the economy in collecting weekly data on deposits and reserves of these banks in the economy in order to remain steadfast with the unforeseen situations. The tools of the CBL are robust and it only needs to be applied correctly where needed. Bankers expectation can raise bank panic when in order there is little or none at all; but also, bankers are worried about the economic environment. I still don’t understand the CBL objective by supplying Commercial Banks with this amount. In my view, I believe commercial banks are insolvent and they need help or maybe CBL has altered some of its policy tool like the reserve requirement that is creating panic. The CBL Governor needs to make it clear why it hopes to achieve in what it has done. Are there low reserves in commercial banks?

  2. The money that we send to our loved ones and relatives does not belong to the National Bank of Liberia. Therefore, there should be no difficulties for them receiving their funds.You have eaten rice from the cooking pot until you have eaten even the rice crust and nothing left to be consumed. DO Not TEMPER with our money send to our people who are suffering under this corrupt government.

    • ET; I definitely agree you. It’s robbery; when they sieze other people’s hard currencies and give them some other currency ie the so called Liberian Dollar; with far less value. It’s simply wrong.

  3. Mr. Greaves, I think you should take over the National of Liberia as its new governor. Because you seem to understand the language of banking. The Weeks have had enough of Liberian people resources. Almost everywhere you turn there must be one weeks. Are they the only ones who qualify do get top jobs in Ellen Johnson Sirleaf’s government?

  4. Chairman Weeks; is the Liberian Dollar, worth the paper it’s printer on? If not, I’m afraid. Liberia is headed to “Hyper Inflations”. Imagine! One Liberian Dollar is not worth one U.S Penny. How do you fit that kind of money in your wallet?

  5. What a shameless group of educated people including the master currency making professor who resides in the US but makes it his business to create money in Liberia prior to each election.
    Where are we since the seven corner, the liberty and now? Who benefits? The truth of the matter is that all those perpetrators of the civil war are still walking scout free when innocent people were killed and properties destroyed. Their fabulous international properties are still standing while they rob the Liberian government to finance their mortgages. Remember, God does not like ugly. What you soar is what you will reap. People who have no lineage cannot inherit the kingdom of God. A hint to the wise is quite sufficient. Justice will be served. Watch my words. WE ARE TIRED. YOU WILL BE PUNISHED. WHAT’S GOOD FOR PETER IS GOOD FOR PAUL. Merry Christmas to you suffering people of God. Be strong. Keep the faith. All is always well with the Children of God. LONG LIVE THE REPUBLIC OF LIBERIA.

  6. THERE IS A TIME AND SEASON TO AL UNDER HEAVEN.All that is unfolding and we are going through,let look up to God at the appropriate time He will make us smile again.
    WHEN GOD SPEAKS ,NOTHING REMAINS THE SAME.
    KEEP THE FAITH.

  7. The CBL is doing a poor job under Mr. Weeks’ leadership. Why should there be a shortage of Liberian Dollars? It doesn’t make any sense because the CBL controls the printing of $L. There is a serious problem developing in the banking sector it seems. Increasingly, businesses, and schools are demanding US dollars for goods and services which is creating severe hardship for ordinary Liberians. For in-country transactions, you should be able to pay for goods and services in either $L or US dollars. That’s how the system is supposed to work in a dual currency. And also, why are there so many long lines at the banks these days? Why does it take a teller 15-30 minutes to complete a small transaction? Banking customers now have to start lining up at 4am in the morning to access their funds. Very poor service! For diaspora Liberians moving back to Liberia, I’ll say enjoy living in pain.

  8. The root cause of this liquidity problem is so plain and glaring. Realizing their time in government was ending soon, government officials and their underlings resolved to benefit themselves in whatever ways possible. Some by taking government vehicles, others appliances and those who are sitting by our cash reserve, you can just imagine their inclination. After all nothing drastic has happened on the international scene recently like one of those steep drops in oil price, or rubber or gold, iron ore, etc., the tired rationale our government uses all the time as alibi to shield, or so they think, their heartless pilfering. But as someone said earlier, these fools are so dumb that they live just within the moment, with no sense of history as a lesson or guide. But time will tell.

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