CBL says as demand for Liberian Dollar increases
Amid the obvious and embarrassing shortage of the Liberian dollar notes of which most are mutilated, the Central Bank of Liberia (CBL) says it has requested the printing of L$75 Billion as part of measures to respond to the growing demand for local currency, but the Legislature approved only L$4 Billion in 2019.
It may be recalled that, at the adjournment of the 3rd sitting of the 54th Legislature, the CBL, through the President, wrote the Legislature for additional printing of the Liberian banknotes, but said communication was forwarded to the House’s Banking and Currency Committee, chaired by Montserrado County District #16 Representative, Dixon Seeboe. There were rumors that the President was on the verge of recalling the Legislature to work after two extraordinary sittings to approve the printing of additional banknotes, among other things, but sources said the President was advised strongly against the return of the lawmakers.
In a statement issued late Monday, November 9, 2020, the bank says fifty percent (50%) of the approved and printed amount has been infused into the market through commercial banks.
“The Central Bank of Liberia has announced that it is taking measures in keeping with its statutory mandate to ensure that adequate Liberian Dollar notes are provided to the population through the commercial banks in the country,” the bank states.
However, in spite of this revelation by the CBL, there remains an acute shortage of Liberian dollar banknotes on the market, thus causing the local currency to appreaciate against the US dollar, while prices of basic commodities remain the same or increase in the economy.
According to the CBL, it is currently infusing liquidity in the Commercial Banks to address the shortage, an exerciese which, it says, it will be done gradually so as to maintain low inflation volatility aimed at protecting the purchasing power of ordinary citizens.
The Central Bank of Liberia indicates that the current restrictive operational autonomy granted it under the CBL Act constrains the bank from taking measures to effectively address the increasing demands of Liberian Dollar Liquidity.
“We had requested the printing of 75-billion Liberian Dollars in 2019, but the Legislature only approved 4-billion at the time. This means increasing demands from several factors to include economic and population effects, dollarization, mutilation, and economic precautions; the need now for the printing of more liquidity cannot be overemphasized,” the bank asserts.