In the wake of rising public concerns over account of the infusion of US$ 25 in the Liberian economy to mop up excess liquidity (Liberian dollars) the Central Bank of Liberia provides clarity on the exercise, detailing that US$17.0 million used in the process is fully accounted for, while the remaining US$8.0 million is with the CBL.
A statement issued Tuesday, 5 March by the Central Bank on the CBL Direct Mopping Exercise, details the intervention began on July 17, 2018 and ended October 18, 2018 with a total of US$17 million used.
According to the CBL statement, US$15 million was mopped-up from outside the banking system in exchange for L$2, 303, 363, 898; and US$2 million was sold to major petroleum importer in exchange for L$313, 141, 800.00 million through regular banking transaction to facilitate imports, which ensured a steady supply of fuel to the Liberian market and prevented economic disruption that a fuel shortage would have caused.
The CBL says the Technical Economic Management Team or TEMT, which is an economic policy-making body chaired by the Minister of Finance and Development Planning, Samuel Tweah with the Executive Governor of the Central Bank of Liberia Nathaniel R. Patray serving as Co-chair, mandated that the mopped-up money be sterilized for one year.
“However, due to complaints from commercial banks and customers during the Christmas seasons that they could withdraw Liberian dollars from the banks, the TEMT authorized the CBL to give L$1.3 billion of the sterilized L$2,303, 363, 898 billion to the commercial banks to meet the Liberian dollar demands for the Christmas season. The CBL gave this money to the commercial banks, and records for these transactions are available”, the statement reads.
The Central Bank maintains that all monies mentioned in the transactions involving the US$25 million are accounted for, and the Bank avails itself of any further scrutiny, either from the Government, external actors, or both.
On July 16, 2018, President George Manneh Weah during a nationwide address on that state of the economy, instructed the Central Bank of Liberia to infuse US$25 million into the economy to mop-up excess Liberian dollar liquidity to stabilize the exchange rate between the Liberian dollar and the United States dollar.
The statement says said measure was implemented by the CBL in close collaboration with the TEMT to whom it submitted regular progress reports. See Page 5 for the full statement by the CBL.
By Jonathan Browne