— Senate’s Banking and Currency C’ttee Advises plenary today
President George Manneh Weah has again written the Liberian Senate requesting its authorization to allow the Central Bank of Liberia to print L$4bn to “ease current liquidity situation.”
In a communication dated December 15, 2019, President Weah emphasized the increasing liquidity needs of the economy, informing the Senate that the current liquidity projection of the CBL, compared with a very low Liberian dollars vault cash position of both the CBL and commercial banks, makes it imperative to infuse additional banknotes to ease the liquidity pressure as a short-term measure.
“Honorable President Pro Tempore, [while] we are aware of that the Legislature is currently deliberating pressing national issues, including finalizing deliberations on authorization of the CBL to print a new set of Liberian dollar banknotes, the existing situation presents a volatile financial environment such that the current Liberian dollar vault cash position with the CBL is very inadequate to meet both current and future Liberian dollar liquidity demand of commercial banks; posing a potential security risk,” President Weah intimated.
The President continued: “Therefore, based on the fact that there exists high pressure on the volume of currency in circulation, I request the Legislature, in accordance with Article 34(d) of the Constitution of Liberia to authorize the Central Bank of Liberia to print and infuse L$4.0 billion of the present currency to ease the current liquidity pressure; I trust that the Legislature will respond in a timely manner, in the interest of our nation and it’s people….”
The President’s communication was sent to the Senate’s Committee on Banking and Currency to report to plenary today.
In an interview with the Daily Observer last week, former President Protempore, Armah Zolu Jallah, asserted that there may be a need to print some money to be able to clear the liquidity problem experienced at the banks, “but the quantum in which it is being requested, our reserve and our economic capacity do not support it; you are calling for LD$35 billion and our reserve is US$40 million, it doesn’t make sense. It is going to lead to hyper-inflation; but we should also understand that we have serious liquidity problem in the banks; we might need to print some money maybe LD$4 billion of the most recent currency to serve that liquidity problem, but it can not be LD$35 billion.”