Liberia: LD Banknotes 'Not New, but Unused'?

The Central Bank of Liberia (CBL) says its attention has been drawn to information circulating in the public, alleging that the CBL has authorized the printing of new Liberian dollar (LD) banknotes, which have been imported into the country. There are also speculations that a consignment of Liberian dollars has been brought into the country.

"The CBL said it wishes to categorically dispel this information and informs the public that the Bank has not printed any Liberian dollar bank notes, least to say that a consignment of LD has been brought into the country," the Bank said in a statement on December 9. "CBL is guided by conventional and statutory policies regarding the printing and importation of banknotes."

Earlier this week, however, legislators were informed that two months of salary arrears were paid into their bank accounts. Montserrado County District #10 representative, Yekeh Kolubah, who made a withdrawal from his LD account at GT Bank in Sinkor alarmed that while there has been several months of shortage of Liberian dollars in the commercial banks and that the banks were disbursing only mutilated Liberian banknotes, he suddenly received a stack of crisp, L$500 notes.

In the absence of legislative approval to print new currency, CBL officials might suddenly find themselves summoned before the Senate Plenary to answer the question of where the "new" money came from, and why these banknotes are being released to the commercial banks now.

The Ministry of Information, Cultural Affairs and Tourism proffered a response to these very questions in a post on its Facebook page, saying: "The Central Bank of Liberia has issued out to commercial banks, unused Liberian Dollar Banknotes that have been in its custody, in the vaults. The bank puts out banknotes, used and unused, from time to time as a routine exercise to meet the liquidity needs of commercial banks. For the record, this administration has not printed any new banknotes."

However, the CBL did not say as much, but only that it had not received authorization to print or reprint money.

Also, according to the CBL, a consignment of U.S. dollars was imported following assessment of the liquidity needs in the financial sector.

"Importation of banknotes is a routine activity of the CBL as a modus operandi of its monetary policy actions and mandate," the CBL statement said. "As per the Central Bank of Liberia Act of 1999, Part V Section 21 (3), the CBL has the authority "to directly administer the currency reserve inventory, develop and implement plans, and ensure the regular supply of banknotes and coins, in order to meet the currency requirements of the economy."

"While the Bank upholds the principles of transparency and accountability, the CBL wishes to further state that the importation of cash is not publicized, but rather subject to established reporting channels in existence at the Bank," the CBL noted. "Finally, the CBL encourages the public to cautiously discuss monetary policy operations of the CBL in order to enhance credibility in the Bank and promote confidence in the financial sector."

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