Liberians are expressing worrying concerns over the rapidly falling value of the Liberian against the United States dollar, which continues to climb.
The value of Liberian dollar continues to fall with a corresponding rise in the exchange rate, a situation that is creating more hardship for the ordinary people especially for small Liberian business who trade in Liberian dollars but are required to pay taxes in U.S. dollars.
Our reporter, who visited the Duala and Waterside markets yesterday, said many traders and shoppers alike expressed concern over the “high speed” with which the United States dollar is distancing itself from the Liberian dollar, with the current exchange rate hitting a new high of L$130 to US$1.
Many ordinary Liberians have decried this situation and blamed it on the Liberian Government. They accuse the government of being insensitive to the plight of the people, noting that the foreign U.S. currency has taken over the country’s economy to the extent that the local currency appears to be growing ever worthless by the day.
A financial expert, who spoke to the Daily Observer yesterday, said the demand for the US dollar has contributed to the decline of the value of the Liberian dollar since 2006. It declined from L$62 to US$1 in 2006 to L$108 to US$1 in 2016; and in 2018, it is anywhere between L$126 & 131 for US$1. The decline in the exchange rate is now being exacerbated by the liquidity crisis. Nowadays, due to the shortage of cash, commercial banks are reluctant to cash government checks or provide credit lines to government contractors, according to the President of the Liberian Banking Association, when he served as a panelist at the Governance Commission Seminar on December 15, 2017.
Justine Brooks, who is the head of the African Exchange Bureau at the ELWA junction, said the exchange rate is currently rising because Liberians value the US dollar more than the local currency.
“For this reason, everything we go to buy on the market we have to buy it in US dollars; and not everybody can afford US dollars, so you will have to buy the goods at a higher rate with the local currency.
“When the rate is high, Central Bank does not give it to us at a lower rate, so it is hard for us to make profit,” said Brooks.
Some petty traders who spoke to our business reporter also questioned authorities at the Central Bank of Liberia (CBL) for not doing anything about this ugly situation, noting, “These guys only care for themselves because they can afford to get the US dollars, and don’t care about us the ordinary people who have no means of acquiring US dollars,” Bai Fahnbulleh, a motorcyclist in Red Light, observed.
“Have they divided it among themselves?” asked a local trader. “I think the government officials have shared the money among themselves; this is why we cannot see the amount of new money on the market; this is why we are suffering with the US rate,” another business man responded.
According to the latter, the President-elect promised during his election campaign that upon his victory, he would ensure that the prices of major commodities would drop in three months.
He, however, cautioned President-elect Weah to bring down the prices of commodities on the market.