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Liberia: CBL Records Over L$3 Billion in Circulation
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The NEWS (Monrovia)
23 July 2008
Posted to the web 23 July 2008
Doe S.K. Davies
Monrovia
In the face of looming hardship faced by a population of about 3.5 million inhabitants, the Central Bank of Liberia has disclosed that currency in circulation, exclusively in Liberian dollars amounted to L$3.3 billion during the first quarter (January-March) 2008.
Making the disclosure in its quarterly Financial and Economic bulletin released to the media Tuesday, the CBL noted that this amount recorded a fall of 5.9 percent compared to the fourth quarter of 2007.
The bank noted that the decline in currency in circulation was mainly influenced by an 11.0 percent fall in currency outside bank, and added that money supply increased by 12.6 percent to L$9,9972.0 million during the quarter, from L$8,859.2 million in the previous quarter.
The CBL indicated that the rise in money supply was largely a result of the ongoing economic recovery process and increased economic activities in the country.
The CBL also divulged that the exchange rate of the Liberian dollar to the U.S. dollar fluctuated between L$63.00 and 64.00 per US$1.00 during the quarter, adding "the end-of-period and period average rates were recorded at L$62.63 and L$62.50 per US$1.00 respectively, while the exchange rate for selling depreciated marginally by 2.8 percent at the end of the quarter compared to December end, 2007."
The CBL also disclosed that it auctioned US$6.5 million as against US$2.5 million in the preceding quarter, reflecting its efforts of helping to maintain broad exchange rate stability.
The bank said remittances, both inflows and outflows, netted a total amount of US$17.0 million during the quarter, while inward remittances totaled US$239.4 million compared to US$213.8 million in the previous quarter, thus recording an increase of 12.0 percent, adding that unlike inward remittances, outward remittances declined by 1.3 percent during the quarter, from US$225.4 million in the preceding quarter to US$222.4 million in the reporting quarter.
Touching on the Liberian Government aggregate revenue and expenditure for the quarter, the CBL divulged that they amounted to L$3,669.8 million and L$2,875.1 million respectively, indicating a surplus revenue of L$794.7 million over expenditure.
"For the reporting quarter, the total public debt stood at about US$5,228.4 million mainly due to interest accumulation. The external component of the public debt totaled US$4,571.3 million, while the domestic debt stood at US$657.1 million.
During the quarter, the IMF announced that it had paid Liberia's arrears of SDR 543.0 million, an equivalent of US$890.0 million. It further announced that Liberia had reached a decision point at which it can benefit from interim debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) initiative," the CBL added.
The bank also divulged that the country's external trade position continued to be in deficits, recorded at US$99.4 million for the quarter, from US$87.6 million in the fourth quarter of 2007, and added that the widening of the deficit is largely on account of limited export base and increase in imports to support the economic reconstruction process.
Meanwhile, the CBL has reported that development in the banking sector during the quarter indicated improvement in the deposit base and gross loan rising by 12.0 percent and 14.0 percent respectively.
"Additionally, aggregate capital of the banking system exceeded the required minimum, measured by the capital adequacy ration (CAR) of 8.0 percent. However, the CAR declined by 3.0 percentage points from 28.0 percent in the previous quarter to 25.0 percent during the reporting quarter," the bank added.
The CBL said it continues to work with the banking sector with the view to improving credit quality and loan administration, and noted that non-performing loans as a ratio of total loans in the industry decreased slightly to 16.0 percent during the quarter, from 17.0 percent at the end of the fourth quarter of 2007.
It asserted that commercial banks' credit to the economy grew by 14.2 percent, from L$4,199.0 million in the preceding quarter to L$4,794.6 million during the review quarter, adding "this growth has helped to fuel the ongoing economic recovery process and stimulate private sector development."
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The bank also noted slight increase in the lending and savings rates during the quarter, and noted that average lending and savings rates increased by 0.3 percentage points and 0.1 percentage points respectively, while average personal loan rate registered a marginal decline of 0.03 percentage points, from 14.90 percent to 14.87 percent during the reporting period.
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