Monrovia — For over four years, the exchange rate between the US dollar and Liberian dollar had remained relatively stable at 150 Liberian dollars to one US dollar. However, in recent weeks, the US dollar rate has experienced an unprecedented and rapid increase, causing significant problems for Liberians, particularly those in the business sector.
FrontPage Africa conducted interviews with several Liberians to gather their perspectives on the sudden surge in the exchange rate. Many of them pointed to the upcoming election activities and the July 26 Independence Day season as the primary factors contributing to the alarming rise in the US dollar rate.
Theodore N.S. Nana, a vendor at Randall Street, expressed his concern, stating, "The rapid increase in the US dollar rate is negatively impacting us because when we sell our goods in Liberian dollars, it becomes burdensome for us to purchase the necessary supplies in US dollars. This affects our profit margins significantly, as we have to buy goods at the high US dollar rate offered by wholesalers."
Nana further highlighted the role of the upcoming election and urged the government to address this issue promptly, stating, "With the Independence Day season and ongoing election activities, the US dollar rate is rapidly increasing. It is a challenging task for the government, which acts as the regulator, to control this situation while focusing on the electoral process. This matter should have been addressed much earlier, independent of the election cycle. The government should engage with business tycoons who hold substantial amounts of money, providing them with a specific rate and closely monitoring the transactions."
Prince Fallah, a businessman in Central Monrovia, emphasized the adverse impact of the rising US dollar rate on small-scale businesses, saying, "The rapid increase in the US dollar rate is harming our businesses. Customers buy goods from us in Liberian dollars, but when we need to restock from wholesalers, we have to pay in US dollars. If we fail to provide the US dollars, they demand an exchange rate of 197 or 198 Liberian dollars. Consequently, when we sell goods for $10 and receive 1800 Liberian dollars, we lose our entire profit in obtaining the high US dollar rate."
Fallah attributed the surge in the rate to the festive season, during which people travel abroad to purchase goods, intensifying the demand for US dollars. He further noted, "Another contributing factor is the ongoing political season, with politicians freely distributing money, which further drives up the rate. Typically, the US dollar rate would decrease after the festive season, but due to the political climate, it may remain high until the end of this year."
James Sebo, a money exchanger in Central Monrovia, expressed his struggles caused by the daily fluctuations in the exchange rate, saying, "Every day, the rate keeps increasing. When you sell your US dollars at a fixed rate, the next day the rate might rise again. Customers who come to exchange money are aware of the rate hikes and expect a higher rate than the previous day. This situation is severely affecting me. I believe we are currently in an election period, and next month will witness campaigning by those seeking re-election. Government officials tend to send their money abroad, which also contributes to the rising rate. Moreover, with the Independence Day season, individuals seeking to purchase goods abroad require US dollars, so it is essential for the rate to be attractive in order to acquire the necessary currency. Therefore, the election and the upcoming July 26 celebrations are the major factors behind the rate increase. We cannot expect stability until the election is over, and I believe the rate will surpass 200."
J. Kingsley Mulbah, a vendor on Un Street, highlighted the serious challenges faced by his business due to the rapidly increasing US dollar rate, explaining, "The unstable US dollar rate is causing significant problems for my business. The shortage of US dollars in the market may be the primary cause. People might be holding on to their US dollars, or perhaps there is a lack of foreign investors entering the country. I do not foresee the rate stabilizing any time soon. Within just a month, the rate has risen from 150 to 186 or 187, and considering it is already July, it is highly likely that it will exceed 200 soon. I recommend that the Central Bank inject more US dollars into the market, as this may help stabilize the exchange rate."
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Zayah Chelly, a vendor at Rally Town Market, lamented the problems caused by the high exchange rate, stating, "The rate is posing serious challenges for my business. The price of a biscuit carton, which used to be 2500 or sometimes 2600 Liberian dollars, has now increased to 3000 Liberian dollars. Additionally, when we need to purchase US dollars, we have to pay a higher rate. We are compelled to buy our goods in US dollars to maximize our profit, as buying in Liberian dollars results in minimal returns. The street rate stands at 930 Liberian dollars for five US dollars, but in stores, we are forced to pay 980 or even 1000 Liberian dollars for the same amount."
As Liberians continue to grapple with the rapid increase in the US dollar rate, it is clear that the forthcoming election activities and the July 26 Independence Day season have been identified as significant contributors to this concerning issue. Addressing this situation will require immediate action from the government, including engaging with business owners, monitoring exchange rates, and ensuring the availability of US dollars in the market.
