Published: January 16, 2025
Monrovia – The Central Bank of Liberia (CBL) has reassured the public that recent fluctuations in the exchange rate are temporary and primarily driven by post-festive seasonal demands for US dollars. The CBL attributed these changes to economic agents in the foreign exchange market seeking to restock goods sold during the festive period.
The Bank emphasized that this trend is consistent with historical patterns during the post-December period and does not signify structural weaknesses in the management of Liberia’s foreign exchange market. It assured the public that the current rate of depreciation of the Liberian dollar is expected to slow in the near term.
The CBL noted that Liberian dollars in circulation represent less than 4 percent of the country’s nominal GDP, less than 15 percent of the money supply, and only about 10 percent of annual import payments as of the end of November 2024. Additionally, net US dollar remittance inflows into the domestic economy were estimated at US$661.8 million during the same period—nearly four times the volume of Liberian dollars in circulation.
“This demonstrates that the volume of Liberian dollars in circulation is proportionately too low to pose any permanent risk of exchange rate instability in the foreign exchange market,” the CBL explained in its statement.
The Bank further encouraged Liberians with significant holdings of Liberian dollars not to panic over the depreciation but to capitalize on the opportunity to grow their savings. It urged the public to invest in CBL Bills, which offer a competitive annual interest rate of 17 percent—one of the highest returns on Liberian dollar investments in the domestic economy.
The CBL reiterated its commitment to collaborating with fiscal authorities and other stakeholders to maintain a stable macroeconomic environment. It assured that it remains vigilant in monitoring foreign exchange market conditions and is prepared to implement additional proactive monetary policy measures as necessary.
In the meantime, the Bank cautioned the public against speculative behavior in the foreign exchange market, encouraging individuals to leverage CBL Bills investments as a means of securing attractive returns while contributing to macroeconomic stability.
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