19 March 2014

Liberia: 'This Is Nonsense'

The Executive Governor of the Central Bank of Liberia(CBL), Dr. Joseph Mills Jones, has described as "nonsense" argument by critics that the policies of stimulating the Liberian private sector amount to "infusing" money into the economy which is leading to the depreciation of the Liberian dollar, thereby causing inflation.

Asserted Governor Jones: "This is nonsense, only intended to confuse the people that the CBL is not working in their interest."

Governor Jones' comments were contained in a press statement he delivered on behalf of the Board of Governors of the CBL on Tuesday, March 18, 2014 at a well-attended press conference held in Monrovia.

The press conference came on the heels of incessant assertions by critics that the CBL was infusing huge United States Dollars into the economy, leading to inflation and that the Bank was "misusing" public resources.

Listen to the CBL boss: "The question is, why go through such length to beat up on the CBL? Most of the CBL's initiatives have been done in United States dollars.

How does an increase in the supply of US dollars lead to the fall in the value of the Liberian dollar relative to the US dollar? When there was no answer to this question, some began to talk about the CBL infusing Liberian dollars into the economy."

The CBL boss, who demanded evidence from those making these claims, explained that when money is infused into the economy, it shows up in the money supply.

He pointed out that the money does not disappear. He disclosed that the CBL provides regular statistics on money supply.

Governor Jones furthered: "Is the CBL buying government bonds?

Is the CBL printing money to finance the government's deficit? If that were the case would that not be a fiscal problem leading to an accommodating monetary stance? Is the CBL bailing out some ailing industry? Is the CBL standing on the street corners handing out Liberian dollars?"

According to him, the Liberian dollar component of the Bank's initiatives is not of the magnitude to create an unstable macroeconomic environment.

He maintained that it is not the main driver of inflation.

"If there is evidence to the contrary, we would like to see it, so that corrective action can be taken. The people should ask for the proof when some of us stand up to speak on important matters of national interest," Dr. Jones accentuated.

"But simply calling press conferences, sometimes purporting to be the leader of a political party, to criticize the CBL, without a piece of solid evidence, is unfortunate.

If they think they are making the CBL look bad, they should know that they are putting themselves in the position not to be taken seriously by the Liberian people and the international community," Dr. Jones among other things added.

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