By Festus Poquie
Liberia’s commercial banks are holding more than $106 million in Central Bank reserves and are reluctant to redeploy the funds into the domestic economy amid rising market risks, CBL Executive Governor said.
The central bank puts the reserves position at $112 million, while as of April 29 it was holding $218 million on behalf of the nine operating commercial banks, Governor Henry Saamoi said when he announced that the monetary policy rate would be retained at 16.25%.
“Banks are afraid to invest because they fear they will not get returns. The situation does not support them to deploy money into the economy,” Saamoi said in Monrovia.
He called for legal changes to enable the central bank to act more decisively to protect both banks and the broader financial system.
Saamoi said he is pushing to amend the Central Bank law to give the regulator stronger tools, including authority to move resources held by willful debtors in one bank to the bank to which they owe funds.
The reforms also envisage certification of credit officers, with the potential revocation of licenses where officers mislead management into granting loans that later turn non-performing.
“If we want to see growth in this economy, jobs created, we must address the issue of non-performing loans,” Saamoi said.
The banking system remains generally stable and adequately capitalized entering into the 2nd quarter of the year, the central bank said, with total system capital rising 10.6% to L$53.4 billion (about $289 million).
Liquidity ratios stood at 53.2%, comfortably above the 15% regulatory minimum, and all commercial banks met minimum capital requirements.
Nevertheless, non-performing loans (NPLs) remain elevated at 2.98 percentage points above the regulatory threshold of 10%, posing a key financial stability risk. Total NPLs amounted to L$13.50 billion in the first quarter of 2026, with the bulk denominated in U.S. dollars.
