MONROVIA – Behind the House of Representatives’ unanimous vote lies a delicate balancing act between currency modernization and inflationary anxiety. Lawmakers have authorized the Central Bank of Liberia (CBL) to print up to L$79 billion in new banknotes. The figure, equivalent to roughly US$433.2 million, is intended to replace mutilated notes, not expand money supply. By approving the full amount at once, lawmakers traded phased control for operational certainty. It hedged that gamble with quarterly reporting and continuous committee oversight. Whether Liberians read the move as housekeeping or monetary risk may shape confidence in the exercise. The measure’s fate now rests with the Senate, whose concurrence would trigger a nationwide currency replacement exercise, as THE ANALYST H. Matthew Turry reports.
The decision was reached during the House’s 18th Day Sitting, when Plenary unanimously endorsed the report of its Committee on Banking, Currency and Insurance. The endorsement followed weeks of public hearings and consultations with key stakeholders.
Extensive Consultations Precede Approval
The approval followed consultations involving the Executive Branch, the Central Bank, the Ministry of Finance and Development Planning (MFDP), technical experts, private sector representatives, development partners, and members of the public. Presenting its report, the Committee said it carefully reviewed the Central Bank’s revised proposal against prevailing macroeconomic conditions, operational demands within the banking sector, and Liberia’s broader economic interests before recommending approval.
According to the Committee, the authorization is intended primarily to replace deteriorated, mutilated, and unfit Liberian dollar banknotes. It is also designed to improve the quality and security of the national currency, strengthen cash availability throughout the country, and maintain the efficiency of Liberia’s payment system.
Full Authorization Instead of Phases
Rather than approving the request in phases, lawmakers adopted what the Committee described as a stronger legislative approach by authorizing the full amount requested. The Committee emphasized, however, that the Central Bank will retain the authority to determine the timing and quantity of banknotes to be printed and introduced into circulation, based on prevailing macroeconomic conditions, replacement requirements, currency demand, and prudent monetary policy.
The Committee argued that approving the entire amount at once would eliminate the need for repeated legislative approvals and provide certainty for the Central Bank, international currency printers, and the Executive Branch. It said the approach would also reduce procurement and production costs while allowing greater operational flexibility.
Lawmakers Address Inflation Concerns
Recognizing widespread public concern that printing additional banknotes could trigger inflation or expand the money supply, lawmakers sought to reassure Liberians that the authorization does not automatically mean more money will enter circulation. Quoting directly from the Committee’s report, lawmakers stated:
“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 Committee stressed that legislative approval simply grants the legal authority to print replacement notes. Decisions regarding circulation remain the responsibility of the Central Bank under existing monetary laws.
Oversight Measures Attached
To strengthen accountability and public confidence, the House attached several conditions to the authorization. These include limiting the approval strictly to the printing and replacement of Liberian dollar banknotes and requiring that any future infusion of currency into circulation comply fully with the Central Bank of Liberia Act and applicable monetary policy.
The conditions further mandate the Central Bank to submit quarterly implementation reports to the Legislature. They also direct the House Committee on Banking, Currency and Insurance to exercise continuous oversight throughout the implementation process.
Most Notes Meant for Replacement
In its findings, the Committee concluded that most of the proposed banknotes are intended to replace worn and mutilated currency already circulating in the economy rather than expand the country’s money supply. The report further reaffirmed that the Central Bank has the statutory responsibility to maintain an adequate supply of clean, secure, and serviceable currency nationwide.
It also noted that newly printed banknotes may remain securely stored in the Bank’s vaults until they are required to replace damaged notes in circulation. Additionally, lawmakers found that approving the full quantity would facilitate more efficient procurement, production scheduling, transportation, insurance, storage, and future replacement operations while avoiding delays and costs associated with repeated legislative approvals.
Measure Heads to Senate
Following debate on the Committee’s report, members of the House voted overwhelmingly in favor of the resolution, officially authorizing the Central Bank to proceed under the safeguards established by the Legislature. The approved instrument has now been transmitted to the Liberian Senate for concurrence.
If approved by the Senate, the authorization will pave the way for the Central Bank to begin implementing a phased currency replacement program. Officials describe the exercise as designed to modernize Liberia’s stock of banknotes while safeguarding monetary stability.