THE COMMITTEE ON Banking, Currency and Insurance of the House of Representatives has stated that after carefully reviewing the revised proposal, prevailing macroeconomic conditions, operational requirements of the banking sector, and the broader public interest, it was satisfied that the Central Bank of Liberia’s request to print new Liberian dollar banknotes is primarily intended to replace deteriorated and mutilated Liberian dollar banknotes, improve the quality and integrity of the national currency, strengthen cash availability across the country, and ensure the continued efficiency of Liberia’s payment system.
THE COMMITTEE EMPHASIZED that rather than granting approval in phases, it adopted what it described as a stronger legislative approach by authorizing the printing of the entire amount requested by the Central Bank of Liberia, while recognizing that the bank will determine the sequencing and timing of production and circulation based on prevailing macroeconomic conditions, replacement needs, currency demand, and fiscal policy considerations.
ACCORDING TO THE committee, the approach offers several advantages, including eliminating the need for repeated legislative approvals for future printing requests, providing certainty to the Central Bank, international currency printers, and the Executive, reducing procurement and production costs, and allowing the Central Bank the flexibility to print only the quantity required when necessary.
THE COMMITTEE FURTHER noted that the authorization demonstrates responsible legislative oversight while preserving the Central Bank’s independence in the implementation of monetary policy.
TO ADDRESS CONCERNS expressed by members of the public, development partners, and other stakeholders, the committee clarified that legislative approval to print the banknotes does not automatically increase the money supply.
“THE LEGISLATURE IS approving the printing of the entire quantity requested by the Central Bank of Liberia. However, the actual production schedule, shipment, storage, infusion, and replacement of existing banknotes in circulation shall be undertaken by the Central Bank of Liberia in accordance with prevailing macroeconomic conditions, replacement requirements, currency demand, and prudent monetary policy,” the report stated.
THE COMMITTEE ALSO recommended several safeguards to accompany the authorization, including that the approval is strictly for the printing and replacement of Liberian dollar banknotes; any infusion of new currency into circulation shall be undertaken only in accordance with the Central Bank of Liberia Act and applicable monetary policy; the Central Bank shall submit quarterly implementation reports to the Legislature; and that the House Committee on Banking, Currency and Insurance shall continue to exercise oversight throughout the implementation process.
IN ITS FINDINGS, the committee concluded that the majority of the proposed banknotes are intended to replace mutilated notes already in circulation rather than expand the country’s money supply.
