For now, the question remains whether the L$79 billion currency injection, and the introduction of a L$2,000 banknote will stabilize the economy or further complicate the daily financial lives of ordinary citizens.
The Central Bank of Liberia (CBL) plan to inject L$79 billion in newly printed banknotes into economy, including the introduction of a L$2,000 denomination has been criticized.
The plan has also received concerns from marketers, predominately women, and petty traders.
they have meanwhile, warned that the move could deepen existing cash-handling challenges rather than solve them.
The policy, announced by the CBL as part of broader monetary measures, is intended to address liquidity constraints, replace worn-out banknotes, and strengthen the Bank’s reserve position partly through the acquisition of gold.
However, many Liberians say, the plan raises more questions than answers, particularly regarding its potential impact on everyday transactions and the logic behind the proposed gold reserve strategy.
Market Reality vs Monetary Policy In interviews conducted across Waterside Market and surrounding commercial areas in Monrovia, several marketers expressed frustration with the current cash system.
Some of them noted that “even the widely circulated L$500 note is already difficult to break into smaller denominations.”
Madam Rebecca Roberson, a petty trader said, the introduction of a higher denomination could worsen the situation.
“The L$500 is hard to change when customers buy small goods like water or other drinks, how will we manage the L$2,000?” She rhetorically asked.
Another marketer, Ma Jennifer Flomo, argued that while high-value notes may benefit large-scale investors or the formal businesses, they are impractical for the predominantly cash-based informal economy.
“The L$2,000 note is not for us in the local market. It may help big people, but not small business people.”
Questions over gold reserve strategy, beyond the denomination concerns, economists, and citizens have questioned the CBL justification that part of the newly printed Liberian dollars will be used to “build gold reserves.”
The core issue, critics argue, lies in the currency mismatch. Gold is traded on the international market in major foreign currencies such as the U.S. dollar and the euro not in Liberian dollars.
This raises concerns about the efficiency of the proposed approach.
Under the current plan, analysts say the CBL would likely need to use foreign reserves (USD) to pay international contractors to print the Liberian dollars.
“For now, it appears that the Bank could lose money through repeated conversions rather than gain value.”
While CBL maintains that the new currency rollout is grounded in international best practices, critics insist that the policies must reflect Liberia’s economic realities particularly the dominance of small-scale, cash-based trade.
For now, the question remains whether the L$79 billion currency injection, and the introduction of a L$2,000 banknote will stabilize the economy or further complicate the daily financial lives of ordinary citizens.