-CBL Clarifies
Monrovia, Liberia – The Central Bank of Liberia (CBL) assures the public that the current exchange rate fluctuations are temporary and primarily linked to the post-festive seasonal demands for US dollars by economic agents in the foreign exchange market to restock goods sold during the festive period. “This trend is consistent with historical foreign exchange market patterns during the post-December festive period and does not reflect any structural weakness in the management of the foreign exchange market,” the CBL noted in a press release dated Thursday, January 16, 2025.
To reassure that the current rate of depreciation of the Liberian dollar is expected to slow down soon, the CBL informs the public that the amount of Liberian dollars in circulation represents less than 4 percent of the country’s nominal GDP, less than 15 percent of the money supply, and only about 10 percent of annual import payments as at the end of November 2024.
“Furthermore, net US dollar remittance inflows into the domestic economy as of the end of November 2024 is estimated at US$661.8 million, almost quadrupling the volume of the Liberian dollar currency in circulation. This implies that the volume of Liberian dollars in circulation is proportionately too low to pose any permanent risk of exchange rate instability in the foreign exchange market,” the CBL narrates.
Hence, the CBL encourages the public with large volumes of Liberian dollar holdings not to panic about the current rate of depreciation but instead seize the opportunity to augment their Liberian dollar savings by investing in CBL Bills at a competitive effective annual interest rate of 17%—one of the highest Liberian dollar investment returns in the domestic economy.
The CBL says it remains committed to collaborating with the Fiscal Authorities and other stakeholders to ensure a stable macroeconomic environment and will continue to monitor foreign exchange market conditions in readiness to implement further proactive monetary policy measures. “In the meantime, the public is urged to avoid speculative behavior in the foreign exchange market and leverage the CBL Bills investment to secure attractive returns while supporting macroeconomic stability,” the Central Bank of Liberia emphasizes in its release.
