The Board of Governors of the Central Bank of Liberia (CBL), proxying for the Monetary Policy Committee (MPC), on Wednesday, 25 October 2023 resolved to maintain the existing monetary policy rate (MPR) of 20% and the reserve requirement ratios of 25% for Liberian dollars (L$) and 10% for United States (US) dollars.
The Bank stated that it has retained these measures to contain any potential build-up of inflationary pressures in the economy over the medium-term.
The Boardโs decisions were made in the wake of the prevailing global economic developments that have trickle-down effects on the domestic economy.
These developments were driven by the impact of the Russian-Ukraine conflict, the effects of global climate change and rise in global consumer prices.
Global and Regional Macroeconomic Developments
The Board observed mixed trends in the world economy. On the one hand, the global economy declined from 3.4% in 2022 to 3.0% in 2023, while at the same time inflationary pressures eased from 8.7% to 7.0% in 2023 as result of interest rate hikes to reverse the rising inflation in several advanced economies.
Unlike the CBL, some ECOWAS nations, for example Nigeria, The Gambia, and the Central Bank of West African States, taking cues from global macroeconomic indicators, increased their MPRs also.
The Domestic Economy
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Like the global economy, the domestic economy also showed mixed trends during the period under review. The domestic economy grew cumulatively to 4.5% at end-quarter three 2023, induced by increased cement and beverages production, increased electricity generation and increased government services. However, developments in the primary sector, especially mining and panning, have not been favorable.
Given the overall growth trajectory of the economy, the Board was optimistic that the 4.6% growth projection for 2023 is achievable.
On the bright side, inflationary trends within the domestic economy have declined to 10.9% in the quarter under review, from an earlier 11.3% during the previous quarter, although the trade deficit has widened, mainly due to a decline in merchandise exports. Gross external reserves were relatively stable at 3.1 months, the same as for the previous quarter, slightly above the ECOWAS threshold of 3 months of import cover. Remittance inflows and outflows slumped during the quarter under review.
The exchange rate depreciated during the period under review, triggered mainly by the persistent trade imbalances, speculation, and other structural constraints. The end-period rate depreciated by 3.6 % from 11.1 % in quarter two to L$186.76/US$1.00, from L$180.28/US$1.0.
The Financial Sector
The banking sector remains strong, well capitalized and liquid in the quarter under review, and continues to finance the private sector. Total loans and advances, total assets, total deposits, and total capital increased, although credits to the manufacturing and agriculture sectors remain low, coupled with high non-performing loans (NPLs).
The CBL Board assures the public and its partners that it will continue to monitor domestic and global economic developments with a view of ensuring financial and macroeconomic stability in Liberia, consistent with the Bankโs core mandate.
I am not in your rice talk. Looking for smoke fish gravy to eat with my fry cassava. Count me out. Bye for now.
To us the reduction from 11.1 to 3.6 percent is imagery until the runoff is completed. Depreciation cannot be decided in the midst of the unforseen. For if we as a people would want to stock a load of Rice at the free port for the Liberian market right now, which of the runoffs would you want to keep the stable food when NEC has not yet told Liberia who the head of the nation ( The President actually elected) is to inaugurate. As for me, will keep my family’s rice myself until your find a head of this nation, especially when I know what the rice riot brought in the past. Your can be eating cassava, deeper, fufu, farina like other Africans, etc..other local designs until after the Election is Certified. My small rice is not enough. I am not giving anyone
With the crisis formula established at the Hut in Ghana for ECOWAS during the Liberian Civil war, when Liberia was coming to a conclusion to its restoration of peace and civil institutions, the secret coefficient as an empirical concluded the fight. I tell you that it might take almost a year for African palaver. The consequential derivative will be finally settled at that African nation’s own hut after the Big Hut which was a sign of the Empire when Mansa Musa reigned those days. El Battuta also had bitter reservations to external solutions, meaning outside a nation or the scope of the Empire. This contemporary society today has driven away force and now looks at Hut settlement. It seems to work as African nations who justify coups and totalitarianism at the hut, have mandates leveled by their democracies or constitutions. Still all ends meet when the Nation as a people finally make the decision for peace and tranquility. We will not make that mistake again. Reason we have high interest in the actuality of the right to the factuality of freedom. Especially the right to vote and not to vote.
The central bank of Liberia retrospects reminder of the then National Bank when it applied macroeconomic structures ahead of micro techniques to suit domestic financial problems. Look my colleagues, our nation is small compared with economies like Nigeria, China, USA, etc.. Yet we do not trade or exchange a pro test to give some value intramurally to the Liberian currency. For instance, the
Nigerian money could be valued not necessarily on par but be a booster to oil sense we now have come see oil. The Jamaican dollar as at Liberian dollar could give some strength to Economic vibration though the low trends. We should stop putting our hands where we cannot reach and ECOWAS will step in, in the absence of a global economic crisis where USD is hardly seen. Tinubu can write and speak some Yoruba and I am sure He is aware that this ECOWAS he now heads was established to improve the living standard of all west Africans while ECOMOG protects all west African properties, but after Liberia’s civil words of untraditional Africa attached them to find financial disputes. We have no time for sanctions and political upheavals. One year has no time for palava. If you have coups and disputes in the African West, solve it at the Biggest Hut in Ghana. Lol