The House of Representatives looked into the hike in the US Dollars exchange rate against the Liberian Dollars on Tuesday, 3 July. It all started after Montserrado County District #2 Rep. Jimmy Smith released a report from the House Committee on Banking and Currency concerning the continuous unprecedented depreciation of the Liberian Dollars against the United States Dollars on the Liberian market.
The committee states that based on the meeting held, they observed that the supply and demand for money has an adverse effect on the price paid for [foreign exchange rate].
According to the report from the committee on banking, the more the supply of the money, the more devalued it is and vice versa.The report says the reserve requirement ratio also has an effect on the money supply or demand on the market, adding that the higher the reserve requirement, the less the supply of a particular currency and vice versa.
The committee says this will have effect on the foreign exchange rate.Also speaking, Bomi County District #1 Rep. Edwin Melvin Snowe warns that the increase in the US rate may lead to political crises if care is not exercised.
Mr. Snowe suggests that it is time the people at the Ministry of Finance leave the campaigning mood and act in the interest of the Liberian people.At the same time River Gee County District #3 Rep. Francis S. Dopoh is claiming that there are three types of Liberian dollars on the market.
By Bridgett Milton–Edited by Winston W. Parley