Milton Weeks, Executive Governor of the Central Bank of Liberia (CBL), yesterday told the Senate plenary that the total amount of Liberian dollars that has been in circulation since last year is around L$12.7 billion.
Governor Weeks disclosed that as at yesterday, the Bank has L$12.7 billion in circulation, adding: “But of that amount, only roughly about L$1.5 billion has been circulating in the banks.”
This, he said, means the CBL has about L$10.9 billion that is outside of the banks’ operations, “and we never see this amount coming in.”
Weeks said that there was a lot of money outside the banking system; the bulk of which, he said, is referred to as “legacy money,” – old currency notes – which are not coming back into the system. This, he said, has limited the ability of CBL, “even if we have turned to the commercial banks to change the money.”
Governor Weeks said, “Most of the money is not in the banking system. It is possible that most of this money that are outside of the banks, per our calculation, might not be there, because some might have almost been destroyed.”
Weeks then told the lawmakers that the bank “believes that it also has an impact in terms of the amount of mutilated notes that people see in the system, because it just circulates outside of the bank; it does not come back into the system; it also has impact in terms of where we see sometimes what looks like influence on the exchange rate, because of the amount of money that is outside of the banking system; that is a possibility as well.”
During yesterday’s hearing, which was also attended by a cross section of citizens, he told the Senators that the solution to what he has already explained to them would be given in the executive session.
Weeks’ appearance yesterday was prompted by a communication from Nimba County Senator Thomas Grupee, who raised concern that even though the CBL was authorized by the Legislature to print new bank notes, and did so in the amount of L$5 billion, there was still heavy circulation of mutilated bank notes at the detriment of ordinary citizens and business places.
Senator Grupee lamented that the situation is so bad that tellers at commercial banks sometimes almost engage into rough verbal exchanges with customers for the mutilated (tear-tear) money.
Neither the Senate nor members of the CBL hierarchy that attended both the opening session and executive could comment on the outcome of the closed door session with Governor Weeks.