MONROVIA – On the eve of President Joseph Nyuma Boakai’s scheduled address to a special sitting of the Legislature, the Central Bank of Liberia (CBL) has mounted a strong defense of its decision to print additional Liberian dollar banknotes, insisting the move is both routine and necessary to sustain economic stability.
At a major press conference held yesterday Wednesday at its Ashmun Street headquarters, the Bank outlined what it described as a carefully calibrated “currency infusion strategy” designed not to fuel inflation but to support a growing economy while replacing deteriorating notes currently in circulation.
Leading the conference presentation, CBL, Deputy Director for Research, Policy and Planning, P. Mah Kruah, laid out the rationale for the printing of new banknotes, noting that Liberia’s current case is a universally accepted standard.
“The primary need for printing currency the world over is to replace worn-out, mutilated, or unfit currency in circulation and to respond to expanding demand in the economy,” Kruah said. “When the economy is growing, there is a need to bring additional currency because transactions will increase.”
A Cash-Driven Economy Under Pressure
The CBL emphasized that Liberia remains a predominantly cash-based economy, where banknotes are subjected to intense wear and tear due to frequent handling and harsh environmental conditions. As a result, a significant volume of currency in circulation has become mutilated or unfit for use.
“This is not an extraordinary measure,” officials stressed. “Periodic replenishment of banknotes is a normal function of currency management.”
Beyond replacement needs, the Bank pointed to population growth and expanding economic activity as key drivers behind rising demand for Liberian dollar transactions. Despite gradual progress in digital payments, public reliance on physical cash remains high.
Why Print More Banknotes?
According to the CBL, the rationale for printing additional Liberian dollar banknotes rests on several interrelated factors: increasing demand for local currency due to economic expansion and ongoing de-dollarization efforts; the urgent need to replace worn-out and mutilated notes; maintaining adequate reserve stock in vaults to ensure operational flexibility; and supporting the Bank’s gold purchase program and broader efforts to strengthen foreign exchange reserves.
The Bank also noted that building a stronger Liberian dollar reserve buffer is critical for enhancing monetary policy operations and maintaining financial system stability.
Infusion Strategy: Guarding Against Inflation
Addressing widespread public concerns, the CBL was unequivocal: printing money does not automatically trigger inflation.
Officials explained that the planned issuance will be aligned with key economic fundamentals, including GDP growth and transaction demand. The objective, they said, is not to flood the market with excess liquidity but to meet genuine economic needs.
“To prevent inflationary pressure, the Bank will deploy standard monetary policy tools,” the CBL stated, citing Open Market Operations (OMO), including the sale of securities to absorb excess liquidity, as well as adjustments to reserve requirements for commercial banks.
The Bank added that as long as money supply growth remains consistent with output growth, inflation risks will remain contained. Stable exchange rate conditions and improved domestic supply chains are also expected to limit price pass-through effects.
Multi-Year Plan Anchored in Economic Projections
The proposed printing exercise will cover the period from 2026 to 2030, with estimates derived from three core components: projected transaction demand based on economic growth trends; replacement of damaged and unfit currency; and support for the gold purchase program aimed at boosting reserves.
This long-term approach, the CBL noted, is intended to avoid ad hoc printing and instead anchor currency issuance within a predictable, data-driven framework.
Safeguards and Oversight Measures
In a bid to reassure the public amid lingering skepticism from past currency exercises, the CBL outlined a series of safeguards to ensure transparency and accountability.
These include legislative authorization of the total amount to be printed, strict procurement procedures, independent audits, and detailed reporting on the delivery, distribution, and destruction of unfit banknotes.
The Legislature, CBL officials emphasized, will play a central oversight role, with oversight powers to request reports, hold hearings, and monitor compliance with the approved framework.
Public Communication and IMF Engagement
Recognizing the sensitivity of currency issues in Liberia, the CBL pledged to maintain consistent public engagement throughout the process.
Measures announced include regular reporting to the Legislature on currency stock levels; increased public awareness campaigns through radio and other platforms; continued consultation with the International Monetary Fund at both technical and advisory levels; as well as engagement with civil society organizations to promote transparency.
The Bank warned that failure to communicate effectively could erode public confidence and fuel speculation, risks it says it is determined to avoid.
Not Expansionary, CBL Insists
Drawing comparisons with the 2021–2024 printing exercise, the CBL maintained that both past and proposed currency programs are not expansionary in nature.
Instead, the 2026–2030 plan is framed as a balanced intervention aimed at replacing unfit banknotes; meeting increased demand driven by economic growth; strengthening foreign exchange reserves through gold purchases; and enhancing monetary policy effectiveness.
Political and Economic Spotlight
The timing of the CBL’s detailed defense comes as President Boakai prepares to address lawmakers on April 9, with the proposed banknote printing and a supplementary budget expected to dominate discussions.
With public trust in monetary management still fragile, the Bank’s message is clear: the printing of new Liberian dollar banknotes is not a reckless expansion of money supply but a structured, necessity-driven policy designed to keep pace with Liberia’s evolving economic realities.