The Government of Liberia, through the Ministry of Commerce and Industry (MOCI) and the Liberia Revenue Authority (LRAJ), The Central Bank of Liberia (CBL), and the Ministry of Finance and Development Planning (MIDP) have issued directives against exchange rate manipulation as well as to direct the acceptability of the Liberian dollar for payments of goods and services as the official legal tender for Liberia in keeping with Part V, Section 22, of the Amendment and Restatement of the Act Establishing the Central Bank of Liberia 2020 (The Amended and Restated CBL Act).
In a recent release, the government says it has observed that some individuals and businesses are in the habit of frequently manipulating the exchange rate between the United States dollar and the Liberian dollar for what they believe to be the purpose of profiteering, speculation, and other selfish reasons at the expense of the larger population.
As noted by the communication that was accordingly signed by Commerce and Industry Minister Mawine G. Bigbs, Thomas Doe Nah, Commissioner General, Liberia Revenue Authority, and J. Aloysius Tariue, Jr., Executive Governor, Central Bank of Liberia, such practices amount to economic sabotage, which is a crime under Liberian law.
With this, the government has mandated that all businesses, including supermarkets, stores, schools, colleges, universities, hospitals or medical facilities, hotels, restaurants, and forex bureaus, are hereby required to publicly display their daily exchange rates between the US dollar and Liberian dollar at their respective places of business, which MUST be in line with the selling rate published by the CBL. “The published daily selling rate can be found on the CBL website and in several local newspapers”.
This is consistent with Part I, Sections 6 (0) and (e), and Pat VI, Section 29 of The Amended and Restated CBL Act (2020), which governs exchange rate policy and management.
More to the above, and In consonance with the statutory mandate, the government has authorized all businesses, including schools, hospitals, universities, hotels, restaurants, and other forms of business, to state their prices in Liberian dollars (and their equivalent in US dollars) and also accept the Liberian dollar as a legal means of payment
According to the various government agencies, the acceptance of the Liberian Dollar is consistent with Part V, Section 22 (1) of the CBL Act, which clearly states that prices for all transactions in Liberia shall be indicated in Liberian dollars and cents. This means that the Liberian dollar is the official currency of transactions, notwithstanding the US dollar being legal tender.
In an effort to effectuate these measures, the government has clearly stated that Businesses and institutions that fail to adhere to the above directives shall face stiff penalties under the law.
Also, to enforce these directives, the relevant government agencies have established hotlines to facilitate public interactions: the Central Bank of Liberia (5455) and the LRA (077572572). “Citizens and residents are encouraged to use these hotlines to report violators of these directives”.
At the same time, the government, through the Ministry of Commerce and Industry (MOCI), the Liberia Revenue Authority (LRAJ), the Central Bank of Liberia (CBL), and the Ministry of Finance and Development Planning (MIDP), has strategized other policy measures to support the wider use of Liberian dollars, including the payment of taxes.
“To address the challenges taxpayers face in exchanging Liberian dollars for United States dollars for the purpose of paying taxes, the Government of Liberia encourages the payment of taxes in both Liberian and United States dollars States dollars”.
As disclosed by the government, this measure means that taxpayers no longer have to convert from one currency to another for the purpose of paying taxes to the Liberia Revenue Authority (LRA). For purposes of clarity, taxes stated in US dollars may be converted at the CBL’s published selling rate on the day of payment.
“To stabilize the value of the Liberian dollar, the CBL issues CBL Bilis every Friday through its regular auction window. The CBL Bills are part of the monetary policy tools of the Bank”, it further emphasized.
As an individual or a business, one can directly buy the CBL Bills through their bank account by subscribing to the CBL auction. “As part of its recent monetary policy decision, the CBL increased the monetary policy rate (MPR) from 15% to 17.5%”.
This means that the interest rate on the CBL Bills is now 17.5% per annum, which is far higher than the current interest rates on savings and time deposits.
Moreover, “Individual investors are paid their investment plus interest every month or every three months. The CBL Bills promote the culture of saving and investment in the Liberian dollar and are part of the broader strategy of the CBL to de-dollarize the Liberian economy and make the Liberian dollar the currency of choice for financial and business transactions in Liberia”.
The Government has admonished all concerned to abide by these directives and encourages all Liberians and foreign nationals residing in Liberia to exercise responsibility in the enforcement of these directives and to take advantage of the additional policy measures intended to support the use of Liberia dollars.
