Barely five days after the huge drop in the LRD/USD exchange rate across the country, the rate is now taking a normal trend, a Daily Observer survey has revealed. Prior to Monday, the exchange rate was L$135 to US$1.
It can be recalled that a few hours to President George Manneh Weah’s State of the Nation Address on Monday, January 29, there was a significant drop in the LRD/USD exchange rate, going as low as L$90 to US$1.
Forex bureaus around Monrovia showed the exchange rate well above L$135 to US$1, just days before the State of the Nation Address.
Interestingly, the drop did not affect prices of basic commodities, including gasoline, transportation, and communication.
According to a Daily Observer survey, the exchange rate dropped due to speculations that the President was going to swiftly intervene by announcing measures that would either stabilize the exchange rate or drop it.
About two weeks ago, Central Bank of Liberia (CBL) authorities intervened to address the fluctuating exchange rate but, it cannot be determined if the intervention influenced a drop in the Liberian to the U.S. dollar.
CBL Communication Director Cyrus W. Badio told the Daily Observer via mobile phone that recently, the bank infused a huge amount of money into the economy to stabilize the rate.
He did not, however, state how much was infused into the economy.
According to some business people, the drastic reduction in the exchange rate is good under President Weah, but pointed out that the prices of goods and commodities were still high on the market.
Ma. Bendu Smith, who sells in the Red Light market, reiterated that although the exchange rate is low, the prices of goods and services are still the same, because commercial drivers still buy gasoline for L$465 and charge L$100 from ELWA Junction to Broad Street.
“When we try to complain, they (customers) usually tell us that the U.S rate is too high. My recommendation to the new government is to drop the prices of commodities on the market and reduce the U.S. rate.
“Another thing the new government must do is to create more jobs for the young people to help reduce poverty in the country, because things are very expensive and the common people cannot afford to provide for themselves,” she said.
A representative of business rights advocacy group Patriotic Entrepreneurs of Liberia (PATEL) also told the Daily Observer that “the entire business community is right now confused because we don’t know where this news came from about the massive reduction in the foreign currency.”
According to him, President Weah promised during the elections that if elected, he will ensure that the prices of major commodities would drop in three months. Based on this, “we thought his State of the Nation Address would immediately reduce the exchange rate.”
He said the country is now in a serious economic crisis, “and therefore, President Weah should hurry up and take Liberians out of the economic doldrums, and the private sector should be given a greater chance in the country’s economic development drive.”