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GoL, U.S reach currency management agreement

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In the face of heighten liquidity crisis amidst the mystery surrounding the missing “LD16 billion” and the controversial USD25 million mopped up money, the United States Government through its overseas development agency USAID has agreed a technical assistance package with the Liberian government to manage its local currency here.

In a statement issued by the Central Bank of Liberia (CBL) recently, the Liberian government and its partners, announces a technical assistanceprogram to be provided through the U.S. Agency for International Development (USAID) to CBL to assist the CBL to more effectively perform its core functions of
managing the Liberian currency and creating the necessary monetary stability for broad-based, inclusive economic growth.

The CBL said given Liberia’s current liquidity situation, in which Liberians are havingdifficulties acquiring sufficient Liberian dollars (LD) and with many of the LDbanknotes in circulation mutilated, the Central Bank of Liberia has determined thatat least a limited amount of additional LD banknotes is needed to support the Liberian banking system and its customers — ordinary Liberians who need to pay for school, healthcare, and other essentials.

It said based on the Liberian Legislature’s consentto the CBL’s request for currency printing, USAID will hire Kroll Associates, authorof the February 2019 Kroll analytic report on Liberia’s previous procedurally flawedprocurement of new banknotes, to assist the CBL in procuring an initial, limited runof additional currency to provide the Liberian people easier access to Liberian Dollars within six months through a credible, transparent, and traceable process.

It could be recalled that the USAID early this year hired Kroll Associates to investigate the missing “LD16 billion”.
“This technical assistance includes assisting the CBL undertaking an open and competitive procurement process for currency printing, tracking the shipment of the currency from the printer to the CBL’s vaults, and properly placing the additional currency into the banking system and broader economy.

The technical assistance will support efforts on the part of the CBL to communicate to the Liberian people its role and proper function in supporting a stable economy and banking system that is accountable and transparent to Liberian citizens, and attractive to investment and development” the statement said.

The USAID support, according to the agreement would be limited to technical assistance provided by Kroll Associates, while the government of Liberia will pay allcosts associated with the printing and transport of the additional banknotes.

The agreement also called for a regularconsultation with representatives of the International Monetary Fund (IMF) inLiberia to also help to ensure that Liberia remains in compliance with IMFprogram requirements and guidance.

As Liberia, like other African countries, movestoward greater use of mobile money, the need for periodic printing of new banknotesshould lessen, but establishing best practices for effective and transparent policieswill serve the CBL and the Liberian economy well over the longterm.

The statement further noted that a principle aim of the engagement of Kroll, recognized for its expertise inhelping clients improve operations, manage compliance and mitigate risks, wouldbe to enhance the Central Bank’s future institutional capability and internal controlsrelating to currency printing and management.

Speaking at the signing ceremony, Mr. J. Aloysius Tarlue, the newly confirmed Governor of the CBL, said “wewant to give the Liberian people an efficient Central Bank whose operations andpolicies can support a growing economy that creates jobs and economicopportunities for every Liberian.” The Governor then thanked the Government andpeople of the United States for their assistance, which he said, “is critical to inspiringpublic confidence in the Central Bank and its operations.”

USAID Liberia Mission Director, Sara Walter, noted “The Liberian people deserve a strong Central Bank. The United States is pleased to help the Central Bank strengthen its capacity to manage the country’s money supply in a way that helps families across Liberia better meet their basic needs, and fuels inclusive economic
growth.”

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