The Liberian dollar continues to lose weight against the United States dollar despite Central Bank of Liberia tight monetary policy measures to ease depreciation and rising inflation.
CBL Tuesday said the exchange rate has remained stable at around L$199.6 per US$1 from March to May 2025. Compared with some ECOWAS regional peers,
Liberia’s exchange rate has shown notable stability. This exchange rate development remains within the ECOWAS ±10 percent macroeconomic convergence threshold, with no abnormal fluctuations observed, reflecting sound liquidity management, the Bank said in a statement shared with the Oracle News Daily.
“The CBL remains committed to preserving macroeconomic stability and will continue to monitor exchange rate developments closely, ready to lean against disorderly market conditions and prevent excessive exchange rate instability.”
In April, the Bank’s Monetary Policy Committee reported in the first quarter end 30 March, the Liberian dollar depreciated against the US dollar by 7.1 percent on average and 8.2 percent at end period.
This depreciation was largely attributed to increased demand for foreign exchange to replenish imported stock of goods depleted in the previous quarter, the Committee said hoping that the rate of depreciation will moderate in the second quarter of 2025, supported by the Bank’s continued tight monetary policy stance. But the Liberian dollar decline continues with the local currency trading LRD200/1USD on the foreign exchange market.
In line with its January 2025 commitment to reduce volatility, CBL raised its monetary policy rate from 17.0% to 17.25% to support price stability. By promoting a stable price environment, enhancing policy communication and improving Liberia’s payments systems through the launch of the Pan-African Payments and Settlement System (PAPSS), the CBL reaffirms its commitment to reduce exchange rate unpredictability.
“The public is encouraged to take advantage of the higher interest rate on CBL instruments by purchasing CBL Bills to earn stable and attractive returns. Currently, CBL holds investments for domestic investors exceeding LRD 10 billion, earning improved returns,” it said.
“The CBL also takes this opportunity to strongly warn the public, especially filling stations, market women, and petty traders, against rejecting the coins for transactions. Such actions constitute a violation of Liberian law, and violators shall be penalized accordingly.”
