All foreign exchange activities were suspended on July 18 for a meeting with the Central Bank of Liberia (CBL) to find solutions to the escalating rate of the US dollar against the Liberian dollar.
The meeting followed President George Weah’s nationwide address about the state of the economy wherein he announced the infusion of US$25 million to mop up huge excess of Liberian dollars on the market.
During the President’s speech on Monday, July 17, there was high public expectation that he would have announced an immediate reduction in the high exchange rate of the US dollar to the Liberian dollar, but he did not.
In the meeting with money exchangers again, there were expectations that the CBL authorities would have made public announcements about measures to control the rapid fall of the Liberian dollar against the US dollar.
Disappointingly for the Liberian people, the CBL simply instructed the money exchangers not to publicly display daily exchange rates outside on walls or pieces of cardboard.
Up to now the public does not know what the daily currency exchange rate is. Meanwhile the Central Bank has, since the meeting, announced an official exchange rate of LD$150 to US$1. However it is extremely difficult to find money ex-changers willing to convert US to Liberian dollars.
The CBL’s recent meeting with the money exchangers is not a daily or weekly routine, but was instigated by growing public apprehensions about the rapidly falling value of the Liberian dollar against the US dollar. Why has the Central Bank forbidden the public display of the daily exchange rate?
Is this a calculated ploy by the CBL to force the public to comply with the whims and fancies of money ex-changers who are arbitrarily setting ex-change rates far below the daily ex-change rate announced by the CBL? The CBL has still not informed the Liberian people about how much money is in circulation. There is absolutely no reason why the CBL has refused to disclose the total amount of Liberian banknotes in circulation.
In similar vein, why has the CBL continued to put mutilated banknotes in circulation and remained heedless to public concerns especially when it is a well-known fact that the past administration caused to be printed millions of dollars in new banknotes?
This newspaper is well aware that the proposed infusion of US$25 million to mop up excess liquidity and stabilize the exchange rate is but a stopgap measure which is non-sustainable in the long term. While the Central Bank has announced a cut in the exchange rate from L$160 to L$150 Liberian to US$1, prices of commodities as well as transport fares have remained constant rather than experiencing a dip.
Given the harsh realities and gravity of the situation, it can be expected that in the not distant future, the exchange rate would again rev up and such may have a potentially destabilizing effect on national security. If the CBL would be fair and honest, it must revert to daily announcements of the prevailing exchange rates as had been done in the past. This will help to significantly reduce uncertainty and speculation. If for any reasons the situation should deteriorate or turn an upswing, the Liberian people should be kept adequately informed and not be allowed to grope in the dark for answers.
Anything short of this will only serve to further undermine public confidence in the Weah led Government and the ability of President Weah to govern. For now, the Liberian people are patient and characteristic of their resilience they have so far taken all in. But for just how long are they going to tolerate the current wave of economic hardships?