Editorial: The Central Bank Of Liberia (CBL) Mitigates The Liquidity Problem
THE PROBLEM OF liquidity in the economy, especially as it involves the in-circulation of smaller banknotes denominations like the L$5 and the L$10 denominations, has been a squeeze on the economy for several months now. Governor of the Central Bank of Liberia (CBL), J. Aloysius Tarlue, acknowledging this problem, has affirmed the lack of smaller denominations of the Liberian dollar banknote on the market. According to the Governor, a banknote has a lifespan of three (3) years; unfortunately, the two denominations have not been printed since 2017—approximately five years now.
HE DISCLOSED THE initiative of the CBL to print the L$5 and L$10 as coins, disclosing that a coin has a lifespan of approximately twenty-five (25) years. Therefore, in an effort to fast-track the printing process a delegation of the CBL would leave the country on Sunday, in order to tour facilities abroad where new banknotes and coins can be printed.
ALL THESE EFFORTS, according to him, are geared toward swiftly mitigating the shortage of the smaller banknotes on the market, which he described as the most actively used denominations and mostly transacted by marketers, drivers and petit traders.
IT CAN BE recalled that sometime last year the country was hit by currency mutilation and the lack of sufficient banknotes to serve the entire population, thereby strangulating the commercial banks and those actively involved with physical financial transactions. To meet the demands of the economy as the Christmas season came close, the CBL, in consultation with Kroll and Associates, hired Crane Currency—the company that previously printed the Liberian dollar banknotes—to print an initial L$4 billion (all in L$100 bills) to be infused into the economy to alleviate the liquidity problem.
FORTUNATELY, THAT PROBLEM has since been resolved, but with another problem of lack of smaller banknotes. Howbeit, the CBL has assured that it is working out all modalities with Royal Mint (UK) to get the L$5 and L$10 coins on the Liberian market as soon as possible.