The Liberian dollar strengthened sharply against the U.S. dollar last week, appreciating about 10.5 percent, the Central Bank of Liberia (CBL) said Wednesday, while reassuring markets there is no systemic shortage of local currency in the banking system.
CBL data show the LRD traded at roughly L$180.00 to US$1.00 (buying) on September 8, down from L$201.08 at end August. A follow up market survey on September 9 recorded L$182.94 (buying) and L$184.94 (selling), confirming a rapid appreciation over the seven day period.
The bank said the move reflects policy and structural improvements rather than a liquidity crunch.
Commercial banks held L$1.65 billion in vault cash as of September 3, 2025, and excess reserves across the banking system have nearly doubled to L$2.02 billion versus September 2024, the CBL said.
“There is no shortage of Liberian dollars in the financial system.” Governor Henry F. Saamoi said in the statement.
Officials attributed the currency gains to a combination of tight monetary policy and improving economic fundamentals. The CBL has maintained a restrictive Monetary Policy Rate of 17.25 percent since April and has sterilized more than L$13 billion to support the foreign exchange market.
Strong remittance inflows — US$425.9 million in the first half of 2025 — and expanding economic activity outside Monrovia were also cited as supportive.
Inflation has eased notably, from 13.1 percent in February to 7.4 percent in July, the bank noted, and further declines were expected for August and September.
Structural factors — improved road connectivity lowering transport costs, expanded domestic energy supply cutting production expenses, and agricultural productivity gains are said to be reducing inflationary pressures and bolstering confidence in the LRD.
The use of the Pan African Payment and Settlement System (PAPSS) for cross border trade was also highlighted as a stabilizing influence.
Market participants welcomed the clarity from the CBL but warned of near term risks.
A rapid appreciation can relieve import price pressures and cool inflation, but it may also squeeze exporters and domestic producers of tradables if the trend persists.
The CBL said it will monitor the foreign exchange market closely to counter speculative distortions and maintain adequate liquidity.
The bank urged the public to avoid panic buying or hoarding of currency, which it blamed for localized cash scarcity rumors, and promised ongoing public updates.
Market Analysts say sustained policy discipline and improved remittance flows will be critical to keeping the exchange rate stable and translating the currency gains into lower living cost pressures for Liberians.
