“CBL Requested LD7 Billion, Not LD75 Billion” -MICAT Clarifies

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The Ministry of Information, Culture and Tourism (MICAT wishes) has clarified that in its Monday, November 9, 2020 Press Statement announcing that commercial banks are being infused with additional liquidity to address the reported shortage of Liberian dollars on the market, it inadvertently asserted that a request for the printing of “75 billion” Liberian dollars was made by the Central Bank of Liberia to the National Legislature.

“The actual figure meant to be communicated was 7.5 BILLION LD, and NOT “75 billion. MICAT wishes to state that the error was only clerical and does not change the real substance of the message that was meant to be communicated, which is that a request for the Legislature to approve the printing of 7.5 billion Liberian dollars was made by the Central Bank of Liberia. The Legislature instead approved 4 billion,” the MICAT release erratum stated, while acknowledging regrets for any inconvenience this may have caused, urging the different media outlets to please reflect the corrected figure in their future publications.

It can be recalled that the Ministry of Information on Monday, November 9, 2020 said “The central Bank of Liberia (CBL) announced that it is taking measures to ensure that adequate Liberian Dollars are available for easy access by the population in the country.

“To address the short term liquidity need of the financial sector, it can be recalled that the Management of the CBL requested the printing of additional Liberian dollar banknotes. The printing request was based on a forecast of about L$7.5 billion (seven billion five hundred million Liberian dollar) triggered by several factors to include economic and population effects, de-dollarization policy, mutilation effect and precautionary motives. However, the Management of the Bank was authorized by the 54tn National Legislature to print only L$4.0 billion (four billion Liberian dollars). This amount was inadequate to address the increasing liquidity demand of the short to medium-term. Therefore, the need for the printing of more Liberian dollars cannot be overemphasized,” the MICAT erratum further clarified.

The Ministry of Information said, of the 4-billion Liberian dollars printed in 500 banknotes, only 50-percent of this amount has been infused in the market which represents the ratio of ‘about 1-to-24 of the L$500 banknotes series (recently printed) to the old banknotes in circulation. The Bank is presently working out modality to infuse additional Liberian dollar liquidity into the commercial banks to address the current challenges of accessing Liberian dollars in the economy, but will do so gradually and strategically consistent with its objective which is aimed at protecting the purchasing power of ordinary Liberians.

The Bank recognized the urgency to print money in response to the increasing demand for Liberian dollar Liquidity. The Bank also attributed the current Liberian dollar liquidity problem to several factors, including the effects of several negative shocks, such as COVlD-19 and seasonal liquidity demand, but has begun working with various stakeholders including the International Monetary Fund (IMF), United States Agency for International Development (USAID) and the National Legislature to find a lasting solution,” MICAT stated, quoting the CBL.

The Central Bank renewed its call to the general public to utilize and accept other medium of payment like mobile money and point of sale (POS) to carry out daily financial transactions in order to ease the burden of a cash driven economy. The Bank also calls on the business community as well as financial institutions to be supportive and work with the Government to alleviate the current liquidity, the release stated.

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