In the wake of mounting concerns about the continuous increase in the exchange rate of the Liberian dollar to the United States dollar, the Central Bank of Liberia (CBL) has vowed to ensure that the rate is stabilized.
To achieve this, the bank says, it will, among other measures, reinforce its monitoring mechanisms and carry out mopping up excess liquidity by issuing “Treasury instruments” with attractive high yielding CBL bills.
“To address the volatility of the Liberian dollar to the US dollar, the bank intends to also increase its frequency and volume of interventions in the foreign exchange market through its auction mechanism,” the CBL said in a statement issued here at the weekend.
Included in the bank’s implementation plan which starts in the first week of July is to further ensure the continuation of its monetary policy stance with the aim of achieving low inflation and broad exchange rate stability.
All of these, it acknowledges, can only be achieved when it ensures that illegal foreign exchange operators and local currency hoarders do not use the current volatility in the Liberian dollar exchange rate to the detriment of citizens.
The CBL wondered as to who is in control of the foreign exchange market, especially where there are uncontrollable numbers of irregular exchange booths in nearly all street corners and communities.
Financial actors believe that the lack of control regarding the establishment and operations of exchange bureaus is a major factor responsible for the volatility of the exchange market, leading to the daily increase of the rate.
