Executive Governor Milton Weeks of the Central Bank of Liberia or CBL has a startling revelation here, disclosing that 10.9 Billion Liberian dollars currently in circulation are outside of the banking system and can’t be accounted for.
He blames the situation on huge quantity of old Liberian banknotes that were put in circulation and have become mutilated, while others are pocketed by private citizens and companies. Governor Weeks spoke at a public hearing in the chambers of the Liberian Senate on Tuesday, 2 May in Monrovia, noting that this problem has put the CBL in a difficult position in replacing mutilated banknotes.
In a relaxed mood before the plenary of the senate, he pointed out that currently, the Liberian government is in possession of 12.6 billon of the newly printed local currency, and of the amount, only 1.6 billion LRD is in circulation while the remaining 9 billon LRD has been distributed among commercial banks , while the rest, which he did not disclose, is at the Central Bank.
The Liberian economy is in recession, with the exchange rate between 110 and 111LRD to one United States Dollar, far above the official rate of 100LRD to $1.00.Commenting on the economic situation, Governor Weeks further explains that the mutilated banknotes continue to roam the local market, noting that some commercial banks are in habit of giving mutilated banknotes to customers, something which, he says the CBL has threatened to sanction violators.
Liberians and foreign residents are pondering over the rapid depreciation of the Liberian dollar to the United States Dollar, with the rate now hitting three digits, a situation that has plunged ordinary citizens into more hardship.
As a result of the situation, the senate’s plenary sometimes ago instructed its Chairman on banking and currency, Grand Gedeh County Senator A. Marshall Dennis to look into the situation, but the Grand Gedeh lawmaker, who has been delinquent since his election, failed to carry out the mandate, forcing the plenary to constitute a special committee which summoned Executive Governor Weeks to provide clarification.
By E. J. Nathaniel Daygbor-Editing by Jonathan Browne