Monrovia - In the wake of hikes in the exchange rate between the Liberian dollars and the United States dollars, Central Bank Governor Milton Weeks has told the senate that there is more than LD$12.6 billion in circulation.
Of that amount in circulation only LD$1.5 billion has been circulating in the bank with more than LD$ 10.9 billion out of the bank. We never see this amount coming in the average that is in the banking system LD$1.5 billion.
There is a lot of money out there bulk of these money are old currency it is not coming back to the system which limits the ability of the Central Banks even if we tell the commercial banks to change the money most of the money is not within the banking system.
Weeks told senators that because huge amounts of the Liberian dollar are out of the banking system it could have a huge impact on the exchange rate and the circulation of the mutilated bank notes.
Gov. Weeks said, in the wake of the huge circulation of the Liberian bank notes the CBL has ordered commercial banks to change mutilated bank notes, though there are some instances where there are complaints that the banks are refusing to do so.
He also told the lawmakers that CBL is concerned about the mutilated notes in the system.
“We have attempted several methods to address the system by telling the commercial banks to turn over all mutilated notes they have in their possession,” he said.
Gov. Week’s appearance before the senate plenary was a result of a communication from the senate (body) to invite the bank to gain an understanding on the state of the economy.
While the Central Bank of Liberia (CBL) publishes the daily exchange rates in several local newspapers and through its website, the published rates seem to be observed mainly by government entities and commercial banks. Very few beyond these entities observe the published rates.
In the general business arena, the rising exchange rate appears to be without control as the rate varies vastly around Monrovia as well as other parts of the country.
In Montserrado County, the province of the nation's capital, the rate of exchange is between LRD 106 (Johnsonville) and 120 (Caldwell) depending on the specific locality.
In Ganta the rate in stores is LD$108 to 110 while on the street, the rate is LD$ 106 to 107. In Gbarnga the rate is LD$ 107.