By Bill W. Cooper
The government through the Central Bank of Liberia (CBL) is said to be seeking the approval of the National Legislature for the printing of new family banknotes with a new currency denomination of LD1, 000 to be printed if granted the approval.
The government’s request, if approved by the National Legislature will observe the keeping of some of the old denominations of LD5; LD10; LD20; LD50; LD100 and LD500, with the new currency denomination of LD1,000 to be added, as it is also expected to have higher security features and designs that would make it difficult to be duplicated.
However, the total amount requested by the Executive Governor of the CBL, J. Aloysius Tarlue to be printed is in the tune of LD48.733 billion new banknotes instead of the LD27 billion requested for recently thus intended to replace the mutilated or old family banknotes including the over LD8 billon on the Liberian market in line with the CBL amended Act.
In the CBL amended Act in 2020; the Legislature amended that the request for printing money should come directly from the Central Bank of Liberia.
In a communication to that august body recently, Governor Tarlue among other things informed the lawmakers that the money requested is needed to address the country’s current liquidity demands for three years (2021-2023) and restoring confidence in Liberian dollars.
“I have the honor to present my sincere compliments and herewith submit to you and the Honorable House of Representatives, Resolution No. BR-02/2021 of the Board of Governors of the CBL about a currency reform proposal for comprehensive replacement of the existing family of Liberian dollars banknotes in three years 2021-2023 for consideration and approval in compliance with Section 23 of the CBL Act. Based on the CBL forecast, the total projected amount of new banknotes to be printed is LD48.733,” the CBL Governor stated to the lawmakers in his communication.
The Resolution was signed by the Executive Governor and Chairman of the Board, Tarlue, Jr.; Mrs. D. Sheba Brown, member; A. Richard Dorley, member; James B. Dennis, member and Amb. Timothy E. Thomas, member.
The CBL request to print new banknotes comes amidst serious shortage of cash in various banks and the ATM machines across the country thereby forcing several Banks to restrict daily withdrawals, something which has of recent led to citizens including travelers to lose confidence in the banking sector of Liberia.
Furthermore, Governor Tarlue’s request to the National Legislature is consonance of President George Weah’s recent appeal to legislators during his 4th Annual Message on January 25, 2021, to act swiftly to resolve the situation before the next season of high demand for cash.
The President pleaded with lawmakers to quickly approve the printing of a new family of Liberian banknotes to rescue the liquidity pressure on the Liberian dollars which he termed as an aggravated increasing-demand for the local currency.
“In the face of this liquidity situation, and while we endeavor to encourage our citizens to sustain the wider use of mobile money for transactions, the Executive will intensify consultation with the National Legislature to pursue currency reform, to promote monetary policy credibility and enhance confidence in the economy,” the Liberian Leader stated.
The CBL further indicated that the House’s approval will fast track the systemic procurement process of printing and delivering new banknotes in the country which may take six to nine months.
Accordingly, LD35, 769 billion will be printed in 2021 (with a cost of US$39.693 million); L$D7.536 billion in 2022 (with the cost of US$3.630 million), and LD5.402 billion in 2023 (with a cost of US$2.199 million) to meet the current and medium-term currency demands.
“The estimated cost of printing the full LD48.733 billion (569.023 million pieces of paper banknotes) for the three years is approximately US$45.522 million. It is important to note that this estimated cost doesn’t include domestic logistics requirements for the replacement exercise and the costs of the designs, quality, and security features,” the CBL boss added.
Meanwhile, following the submission and reading of the communication from the CBL, the House on Wednesday voted that CBL’s communication and proposal be sent to the Committee on Banking and Currency and report in two weeks. Courtesy to Daily Observer.