Liberian President George Manneh Weah has called on the members of the legislature to work swiftly for the timely approval of LRD$27.5 billion new banknotes to be infused into the economy.
President George M. Weah, in his fourth Annual Message on January 25, 2021, urged members of the House of Representatives and the Senate to act swiftly to resolve the situation before the next season of high demand for cash.
“In the face of this liquidity situation, and while we endeavor to encourage our citizens to sustain the wider use of mobile money for transactions, the Executive will intensify consultation with the National Legislature to pursue currency reform, with the aim of promoting monetary policy credibility and enhancing confidence in the economy,” President Weah said.
He added: “In the current environment in which the CBL does not have control over the more than ninety (90%) percent of Liberian dollars which are outside the banking sector, the effectiveness of monetary policy is undermined. Our goal is to reset the foundation of monetary policy.
Given the importance of the Central Bank to our economy, we will further implore the National Legislature to help strengthen its institutional independence in line with internationally accepted norms.”
The President, in further arguments to the lawmakers, stressed that despite the printing and delivery of L$4 billion in July 2020, the economy was challenged by the difficulty of access to Liberian dollars in the financial sector, largely reflecting about forty (40%) percent rate of mutilation of the existing Liberian dollar banknotes in circulation.
Cash shortages in Liberia
Liberia is currently engulfed with cash shortages at various commercial banks.
In 2019, the government of Liberia printed additional LRD$4 billion banknotes to remedy the situation to no avail.
According to report, the printing of the new banknotes will cost the Weah led government at least US$27.5 million if it is authorized by the legislature to go ahead.
Central Bank of Liberia executive Governor Aloysius Tarlue, recently told pronouncement when he appeared before the Plenary of the House of Representatives, along with other top officials of the bank.
Liberia Public Radio national correspondent at the legislature said several lawmakers attempted cross-examination of the CBL Governor to give detail information on his proposed request, but were told to reserve their questions for a closed-door session which members of the House of Representatives opted for.
Governor Tarlue told members of the House that several reasons behind the money shortage which he said was worsened by COVID-19 pandemic the high demand of money during the festive seasons (July 26 and December 25).
“The banks are in the business to make money. So, if you don’t pay your loans, then the banks don’t have money,” he said.
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