Against the backdrop of rising public concern about the acute difficulty faced by the public at large to access cash from remittances through Western Union and MoneyGram as well as from individual deposits, the Governor of the Central Bank of Liberia(CBL), Milton Weeks, has disclosed that the CBL has provided an amount of L$2. 7 billion roughly equivalent to US$21,259,842 to address the liquidity crunch. He says the amount, provided since last week is intended to contribute to economic growth and the livelihood of the banks' clients.
Governor Weeks further disclosed that as far as he was concerned there are no pending requests from commercial banks. He attributed the liquidity problem to what he described as a slight delay in the currency management process at the bank. He said 'getting reserve funds from operational vault to commercial banks' was an operational issue that has been resolved, adding, "but for people to go the extent of saying that there is no money or cash in various commercial banks, that's completely false", he declared.
But contrary to Governor Weeks' assertions that the liquidity problem has been eased, the Daily Observer continues to be flooded with reports from an anxious public that they are being turned away by banks with the explanation that the banks do not have any cash. They complain that aside from being unable to access money from deposits, they are also experiencing extreme difficulties receiving remittances from abroad through Western Union and MoneyGram.
A customer (name withheld) who spoke to the Daily Observer disclosed that he went to a local bank yesterday to withdraw an amount of 2,000 USD but was turned away by the bank for the same reasons -- no money. Its banking hall, normally over crowded at this time of the year, was virtually empty and deserted.
It can be recalled that only last week the president of the Liberian Bankers Association, John Davies, during a presentation at an economic policy forum hosted by the Governance Commission attributed part of the problem to the lack of trust between the CBL and commercial banks. He stressed the need to restore trust to the sector wherein individuals can take a GOL contract to the bank for financing and expect fruitful results rather than the involuntary knee-jerk reaction"NEXT" to prospective clients seeking bank financing for projects,business ventures, etc.
Although Governor Weeks has disclosed that the glitch which caused interruptions to the release of currency to the banks has been overcome for over a week now, the effects of his pronouncements remain to be seen as the liquidity situation remains much the same with customers still being turned away for the lack of cash to meet their demands. Even the Daily Observer has been impacted by the severity of the problem and has been facing acute difficulty accessing cash from the banks to pay staff salaries and meet other operational expenses.
Meanwhile, Governor Weeks says "despite challenges, the economy is on the path of a rebound; however, exchange rate and inflationary pressures persist in the wake of elections uncertainties, continuous high demand for foreign exchange to facilitate imports, infrastructural challenges, and other external factors, especially continued low trending in global commodity prices.
"We will continue to work with the fiscal authorities through the Liquidity Working Group and other such forum to collaboratively address the liquidity challenges by identifying intervention strategies for positive impact".
David A. Yates