Liberia: Marketers Feel the Pinch as Liberian Dollars Become Scarce, U.S. Exchange Rate Depreciates Steeply; CBL Promises to Act Swiftly
MONROVIA – The abrupt sharp decline in the exchange rate between the Liberian and United States dollars is said to be worsening economic constraints and improving additional hardship on vast majority of Liberians, most of whom are impoverished.
For nearly two weeks now, the exchange rate between the US and Liberian dollars has declined drastically, but the prices of basic commodities have not been affected greatly.
The unstable exchange rate has greatly affected commercial activities, including the sale and purchasing of basic goods and services.
On the Bushrod Island, outside Monrovia, the exchange rate stands at US$1 to 150 ( or L$750), while in Central Monrovia, Sinkor and other areas, the exchange rate is US$1 to L$140 or L$145 (L$700 or L$725).
Last month, the exchange rate between the two currencies experienced stability and stood between US$1 to 180 or 190LD (900LD to 200LD) in other places, but the condition dramatically changed following the scarcity of the local currency at various commercial banks operating in the country.
Speaking in an interview with FrontPage Africa in the commercial area of Duala on the Bushrod Island, outside Monrovia, scores of citizens, including marketers, vendors, petty traders, among others vented out their anger over the current situation.
They also claimed that some “unscrupulous business people” are also using the current situation to exploit the Liberian people.
Abigail Wreh, 24, a seller of hand bags, believed that the current situation is impeding economic growth and development in the society.
She claimed that store owners continue to use the previous exchange rate of 200 Liberian dollars to US$1, when the local currency is being used to purchase goods at these stores owned by importers.
“The rate is very low. It dropped outside, but in the stores where we can buy, the rate is still high. If you go to buy in Liberian dollars, you will have to pay L$1000 for five dollars US. But if you come outside to change your money, the people will give you L$750”.
“When you are going to buy and even carry the United States dollars; the people will ask you to add 150LD each on every 5USD to correct the money to buy. The store owners are accepting Liberian dollars but their rate is L$1000. This is really hurting us; If the rate drops, it should drop all over”.
She claimed that customers are no longer purchasing goods as compare to last month as a result of the depreciation of the Liberian bank notes.
“Business is really hard right now. Sometimes when you come, people can only buy one, two, three items for the whole day and as you are going home, your children need to eat. You have to buy soap and other things to take care of the home”.
Mother Annie Nagbe, a seller of frozen food, claimed that marketers are now constrained to “join or put money together” to enable them purchase their goods from the stores.
She noted that though marketers were independently buying their goods prior to the situation, the decline of the exchange rate between the United States and Liberian Dollars make it difficult for them to buy cartoons of frozen food on their own.
“You have to wake up early in the morning and come to the market and stand before the store to wait for your friend to come so your can join money together to buy one cartoon of chicken feet, or pig foot”.
“First time, I used to buy and sell about three to four cartoons a day. But now, if you and your friend join and even buy two cartoons, if your don’t take time, the market will leave in your hands. People are not even buying because of the rate. If they bring US dollars to us and we give them the rate, they can go different place. And we ourselves too, buying for high rate in the store”.
Mother Nagbe added that the situation will deteriorate if concrete steps and stringent measures are not taken by the relevant authorities.
“Sour” festive season
Consumers are alarming that the festive season will be “sour” for them and their respective family members if the Liberian currency continues to loss its value in the midst of extreme economic hardship and the increase in the prices of basic commodities.
They observed that consumers are the ones who are feeling “difficulties” the most as a result of the low current exchange rate between the LD and US.
“A businessman will always want to make profit because, that’s the main reason he is doing business. If he buys a bag of rice for 10USD, he will sell it for 15USD. At the end of the day, you will find out that we the consumers will be the ones to suffer. The cost of living right now is high” an elderly man who identified himself as one Anthony stated.
“The Christmas and New Year will be sour for some of us and our children if this low rate business and high prices continues because; the prices of things are still high. People going to buy goods right now to come and auction it, will not do so again because; they too are buying their goods very expensive. We still buying a half bag of rice the same price, but the rate is down”, an elderly woman who preferred not to be named stated.
Calling of names
Local money exchangers on the sidewalks, market places and other areas claimed that they are being called ‘negative names’ as a result of the decline in the exchange rate.
According to them, customers and others who are not cognizant of the abrupt depreciation normally referred to them as “rogues, criminals or thieves”.
They claimed that the heads of various foreign bureaus where they normally exchanged their United States dollars for Liberian bank notes, are no longer given them the Liberian currency in abundance.
They blamed the situation on the alleged failure of the commercial banks to timely disburse monies to owners of these foreign exchange bureaus they normally visit to change their monies.
“Last month, the rate was 180. Each time we go sell the USD to LD, we observe the shortage of the Liberian dollars. And so, these people are decreasing the rate because, there is no Liberian dollars. We are being called so many names because of this. People are saying that we are stealing from them and they called us criminals”, Emmanuel F. George, a local businessman changing money opposite the St. Mary Catholic School stated.
CBL rate snubbed
George continued: “We want government to see how best the rate can be stabilized because for now, customers are complaining that it is not the real rate from Central Bank. Nobody is going by CBL rate because of the decrease of the Liberian dollars on the market”.
Decline in business
The local money exchangers pointed out that business has significantly dropped as a result of the situation.
“Before the rate dropped, I used to change around US$500 to US$600 a day. But now because the rate is low, we can change sometimes 150USD to 200USD. Most people when they come and you tell them the rate is 160, they will say the rate is low and they are looking for higher rate. My expenditure right now is more than my income and this is causing serious problem for me”, Otis Anderson, 35, noted.
Search for higher rate
The current scarcity of the Liberian dollars on the local market has compelled citizens to ferry from one local money changer to another asking for the exchange rate before taking their monies out of their purse, bags, wallet or pockets.
Citizens trooped to local business centers or foreign exchange bureaus with favorable exchange rate.
In some instances, some of them travelled or trekked long distances just to change their monies for “high rate” to purchase basic commodities, or pay for services rendered them.
Having a high exchange rate is like a rush for “gold dust” nowadays in Liberia.
“How much is the rate here? Your rate is really, really low. How much are you selling scratch card? You are changing money for 160 and you selling scratch card for 200LD?” an aggrieved elderly woman stated as she hurriedly passed a local money exchanger in Duala.
Papa Kamara, 35, is a trader who owns clothes shop in Duala.
According to him, owners of businesses are constrained to request additional money for their respective goods which are being sold in United States dollars, due to the scarcity of the Liberian bank notes.
“I sell my t-shirt for 10USD for now; but if you don’t have USD, I can receive 1, 800LD for US$10; that’s my rate. For now, we are not really receiving customers as compare to the past. Business is very, very slow”.
“About two, three months ago, I used to make about US$500 or US$300 a day, but for now-for me to even make US$200 a day-it’s tough. When we go to the bank to get money very fast to do business, the bank will tell you the system is down or no money”.
Release the Liberian dollars
Meanwhile, Liberians are calling on government through the Central Bank of Liberia (CBL) to “release” Liberian dollars in huge quantities and denominations to the various commercial banks operating in the country.
According to them, importers and stores owners are also craving for the Liberian bank notes and as such, government should see reason to infuse the local currency into the banks for clients and customers to be able to receive their monies without any hindrance.
“If you go to the bank to get money, the bank will say we can’t give you more than L$5,000. That’s the highest they will give you. They say no money. The rate is down, but the prices are still high. The stores people too are taking the rate as 200; but when you carry US they will not take the rate like that” Saah Kandh stated.
He continued: “Right now; sometimes whole day I can only change US$100 because people keeping their US dollars now. The rate is low and they are not willing to change their money when the prices are still high”.
On Monday, the government, through the CBL, announced that it is taking measures in keeping with its statutory mandate to ensure that adequate Liberian Dollars are provided to the population through the commercial banks in the country.
A statement issued through the Ministry of Information Cultural Affairs and Tourism disclosed that the CBL “is currently infusing liquidity in the Commercial Banks to address the, shortage, but says it will be done gradually so as to maintain low inflation volatility aimed at protecting the purchasing power of ordinary citizens”.
The CBL maintained that the current restrictive operational autonomy granted it under the CBL Act constrains the bank from taking measures to effectively address the increasing demands of Liberian Dollar Liquidity.
“We had requested the printing of 75-billion Liberian Dollars in 2019, but the legislature only approved 4-billion at the time. This means with increasing demands from several factors to include economic and population effects, dollarization, mutilation and economic precautions the need now for the printing of more liquidity cannot be overemphasized” the bank asserted.
In less than five years, the Government of Liberia has printed the amount of L$20 billion Liberian bank notes to “replace mutilated bank notes on the local market”.
The amount of L$16billion was printed during the administration of former Liberian President Ellen Johnson-Sirleaf, while the remaining L$4billion was recently printed by the Coalition for Democratic Change (CDC) led government of President George Manneh Weah.
Since the printing of the separate batch of monies, there have been numerous public outcries about the whereabouts of the new Liberian bank notes as commercial banks continue to disburse mutilated Liberian bank notes that are not usable to clients and customers.