As exchange rate hits artificial drop
Liberia’s main opposition establishment, Collaborating Political Parties (CPP) has described as counterproductive to the country’s economic growth the Coalition for Democratic Change (CDC) – led government’s alleged broad daylight hardship imposed on the citizenry.
In a statement issued by the CPP Executive Committee Monday, 25 October 2021, the opposition bloc observed that since the CDC regime conducted a controversial and fraud-laden US$25m Mop-Up Exercise in 2018, the last quarter of each year has been characterized by a strange scarcity of Liberian dollar banknotes on the market.
According to CPP, this strange scarcity of Liberian dollar banknotes often comes with a corresponding precipitous drop in the Liberian Dollar-US Dollar exchange rate.
This is not only counterproductive to the economic growth desperately needed, but it is broad daylight hardship being imposed on the people of Liberia by the CDC-Led Government,” the CPP said.
“Not surprisingly, this nightmarish scenario has begun to raise its ugly head this year. This time around, it is the refusal of the government through the Central Bank of Liberia (CBL) to supply needed Liberian dollars, which has led to a complete shortage of the Liberian dollars on the market,” the statement said.
The CPP Executive Committee wonders how the government can sit idly with such insensitivity to the Liberian people when prices of food, clothing, and other essential commodities are still high while the Liberian dollar is appreciating.
The party noted that its recent check on the CBL website shows that monthly data on inflation since June ending 2021 is yet to be published by the CBL.
It challenges the CBL to wake up and not allow itself to be a puppet in the hands of politicians seeking their personal welfare over the Liberian people.
The CPP opined that one significant factor explaining this shortage of the Liberian dollar on the market during the last quarter of the year is the deliberate and intentional failure of the CBL to service Liberian dollar withdrawal demands of the commercial banks that are obligated to hold Liberian dollar current accounts with the CBL.
It indicates that this gross failure of the government to meet its commitments to the commercial banks consequently translates to the growing lack of confidence in the Liberian banking sector by the public.
“It is quite surprising to hear the Minister of Finance speak of achieving single-digit inflation in an environment of induced appreciation of the Liberian dollar against the US dollar,” the CPP said.
The opposition party suggested that this, accompanied by the rapid eroding of consumer purchasing power is simply a sophisticated and well-orchestrated deception taking place before “our very eyes.”
It reminded President George Manneh Weah that the Liberian people deserve better living conditions than what they are now experiencing after all his campaign promises.
The CPP argued that regardless of how economic data and the facts are twisted, the average Liberian knows what it means to be hungry and deprived.
It stated that the people in basic terms, do not need anyone to tell them that as the local currency in which they trade and their salaries are paid appreciates, the prices of food items (especially their staple, rice), gasoline, transportation fares, school tuitions, and fees, among others, are expected to reduce.
It continued that politics and economics are immiscible, saying, unfortunately, while the people suffer the excruciating effects of this economic contradiction, some officials and apologists of the CDC government are rather celebrating the suffering of the Liberian people.
It leaves the CPP to further raise a question as to how they can claim that they are doing a good job when the people here are crying this much.
CPP recalled that when officials of the CDC Government were actively seeking legislative approval for the printing of additional Liberian dollar banknotes, they promised that this would bring to an end, once and for all, this recurring last-quarter nightmare of shortage of Liberian dollar banknotes at the commercial banks and in the market.
It said the Legislature must give back operational independence to the CBL that allows the CBL to print Liberian- dollar banknotes in line with economic fundamentals and stop using the current approval process negotiations every time the CBL comes seeking approval to print.
“Do the honorable thing LEGISLATURE by addressing ambiguities in Part II Count 2, Counts 6B, 6C, and 6O; Part V Count 23 (1 and 2); and Article 34 (D) of the Liberian Constitution and ultimately amend the October 21, 2020, Amended CBL Act to restore CBL to normalcy and alignment with international and regional best practices,” the party said.
It noted that this should then pave the way for the appointment of competent and professional Liberians with track records in the business of monetary policy design and implementation to sit on the Board and senior management of the CBL.
“The CPP, therefore, demands that the CDC Government fulfill its promises and urgently put an end to this exploitative and anomalous economic situation,” the statement said.
It called on the Government to stop seeking imaginary solutions to the challenges of the Liberian economy and instead focus on predictable actions and systemic changes that will improve the economic fundamentals of the country.
These actions, it said, will include, inter alia, growing the productive sectors of the economy, improving service delivery across government, fighting corruption robustly and impartially, and improving the security climate in the country.
It also mentioned vigorously fighting ritualistic killings, supporting Liberian entrepreneurship in critical sectors such as agricultural value addition, and respecting the merit system.
On another note, the CPP condemns in the strongest term the deliberate refusal by the government to allow a helicopter belonging to the Political Leader of the People’s Liberation Party (PLP), Dr. Daniel Cassel, to land despite satisfying all of the requirements prescribed by the Liberia Aviation Authority.
CPP said the refusal infringes on the rights of Dr. Cassell and is clearly based on political grounds.
It added that this also demonstrates how far this government is prepared to go to suppress the opposition.
“We, therefore, call on the government to immediately correct its actions, which could set unintended precedence and have undesired consequences,” it concluded.https://thenewdawnliberia.com/cbl-cuts-policy-rate-to-strengthen-liquidity-and-support-economic-recovery/