Finance minister Amara Konneh has blamed the alarming United States Dollars rate of inflation in the country on the infusion of more Liberian dollars into the economy.
Addressing a press conference Tuesday at the Ministry of Information , the Finance minister said there has been a persistent depreciation of the Liberian dollars to the US dollars.
He added that this is affecting the majority of Liberians who earned their income in the LD since the market price is often pegged to the US dollars to the US dollars due to the dual currency regime.
According to him, the depreciation of the LD has been driven mainly by the structural imbalance between the supply and demand for the US dollars in the market.
Minister Konneh said due to high and growing trade with practically everything that is consumed in the Liberian economy are imported while exports receipts have somewhat stagnated.
"Another reason for the depreciation is the injection of more Liberian dollars in the economy in the last six months, and as you are aware, the CBL has a number of monetary instruments at its disposal which it is using to intervene to stabilize the exchange rate" he added.
Looking at the fiscal side, Minister Konneh noted that the policy measures may not be as effective as those of the CBL in influencing the exchange rates movements, which according to him can still help reduce the demand pressure for the US dollars in the market.
These policies alone will not necessarily halt or reverse the current depreciation of the LDs but together with the appropriate policy actions of CBL believes they will help stabilize the exchange rate between the LD and the US dollars in the medium to long term, Minister Konneh noted.
He used the occasion to disclose that in subsequent time the ministry will encourage tax payers to pay more of their taxes in LD, which according to him will be publish with detail later.