The Central Bank of Liberia or CBL has issued a statement saying it would ensure transparency in the printing of the LD$4 billion request by President George Weah to stabilize the present economy situation.
The CBL statement follows the approval by the Legislature authorizing the Bank to print L$4.0 billion Liberian dollars to ease the liquidity situation in the country, the procurement process relating to the printing, shipment and delivery of the money will be implemented in conformity with transparent, accountable and credible procedures as well as in strict adherence to national laws, internal regulations and acceptable professional practices and standards.
The decision to print Liberian dollar banknotes is in accordance with Parts II & V of the Central Bank of Liberia (CBL) Act of 1999. Under these provisions, the CBL, upon the approval by the National Legislature, has the responsibility to print and issue Liberian dollar banknotes in the economy.The CBL reminds the general public that the printing, shipment and delivery of banknotes, which are usually guided by standard procedures, are normal operation of all central banks across the world.
The printing of Liberian dollar banknotes is triggered by the lingering liquidity squeeze in the financial sector, potentially arising from the mismatch between fixed stock of Liberian dollars in the economy over the last three years and the high Liberian dollar liquidity demand. This demand is also largely explained by the increasing volume of mutilated Liberian dollar banknotes, the introduction of a surrender policy on remittances of foreign exchange, increased collections of duties/taxes in Liberian dollars.
Other demand factors include the spiraling inflation that is fueling more need of spending in Liberian dollars, perennial lack of bank branches in few counties to mobilize deposits in Liberian dollars, and the demographic effects of newer age groups entering the labor force, thus inducing demand for Liberian dollars. As a lender-of-resort of Liberian dollar, the CBL has the responsibility to ensure the smooth operations of the financial sector and effective implementation of monetary policy to support the economy at large, with the aim of promoting macroeconomic stability.
Meanwhile, the CBL reassures the public of its commitment to strengthening its internal processes, as part of the much-needed reform of the Bank. The CBL shall work with international audit experts, with the objective of improving the cash control management and internal audit function of the Bank, as well as ensuring corrections of internal controls.
The bank also encouraged all businesses and the Liberian populace to be receptive to non-cash means of payments for transactions. The CBL believes that liquidity pressures can be eased with the general acceptability of electronic modes of payments, such as mobile money, and points of sale (PoS) terminals. The use of digital payments provides efficient benefits to the economy, including economizing future cost of currency printing, countering money laundering and terrorist financing, strengthening efficiency of revenue mobilization and accelerating financial inclusion. Local and international investors are encouraged to bring their innovations to the fore by investing in financial digitization and the overall digitization of the Liberian economy.