IMF report identifies limited banknote reserves as questions emerge over liquidity management and the benefits of currency appreciation
MONROVIA, LIBERIA — Liberia’s recent exchange-rate movements are raising questions about the Central Bank of Liberia’s (CBL) monetary policies, particularly its efforts to control liquidity while the Liberian dollar strengthens against the United States dollar.
Although the appreciating currency could help reduce the cost of imports, concerns remain over whether businesses and ordinary consumers are benefiting from the stronger exchange rate and whether physical Liberian-dollar cash is sufficiently available to meet economic demand.
An April 2026 report by the International Monetary Fund (IMF) provides important context for the debate, documenting the CBL’s efforts to absorb excess liquidity and identifying concerns about its remaining banknote stocks.
However, the available evidence does not establish that the Central Bank is deliberately withholding Liberian dollars to artificially strengthen the local currency.
IMF REPORT HIGHLIGHTS LIQUIDITY CONCERNS
According to the IMF, the outstanding stock of CBL bills averaged approximately L$9 billion in the fourth quarter of 2024, increasing to about L$10 billion in the fourth quarter of 2025.
Central Bank bills are monetary-policy instruments used to absorb liquidity from the financial system. While such operations can help control inflation, their effects on commercial-bank liquidity and economic activity depend on how they are implemented.
The IMF report also disclosed that the CBL held approximately L$5.1 billion in remaining banknote stocks at the end of December 2025, equivalent to about 11 percent of currency in circulation.
The authorities considered this amount insufficient to meet projected demand during the fourth-quarter peak season of 2026 and over the medium term. Plans included expedited procurement of new banknotes, with an emergency first batch expected by November 2026.
These figures raise questions about the availability and distribution of physical currency. However, limited banknote reserves do not automatically prove that the Central Bank is deliberately restricting cash circulation.
STRONGER EXCHANGE RATE, BUT ARE CONSUMERS BENEFITING?
The CBL’s published rates show the Liberian dollar trading at approximately L$169–L$171 per US$1 in late October, compared with rates above L$180 per US$1 in late August.
A stronger Liberian dollar can reduce the local-currency cost of imported goods, provided importers can access foreign exchange at the improved rate and pass the savings on to consumers.
However, exchange-rate appreciation does not automatically translate into lower market prices. Existing inventories, transportation costs, port charges, taxes, financing expenses, and other business costs can delay or limit price reductions.
Reports published by The Liberian Investigator in October highlighted concerns about the gap between exchange-rate movements and prices in the marketplace, prompting renewed attention to whether consumers are benefiting from the currency’s appreciation.
The central question is whether the stronger currency reflects sustainable market conditions, monetary-policy measures, increased foreign-exchange inflows, or a combination of factors.
DID THE CENTRAL BANK DELIBERATELY RESTRICT LOCAL CURRENCY?
The allegation that the CBL is withholding Liberian dollars to create an artificial appreciation is serious and requires verifiable evidence.
Such an investigation would need to examine currency in circulation, banknote stocks, commercial-bank cash availability, CBL bill operations, foreign-exchange transactions, and any documented restrictions on cash withdrawals or currency distribution.
The IMF findings confirm that the Central Bank has conducted liquidity-absorption operations and faced banknote-supply concerns. They do not establish that these measures were deliberately designed to manipulate the exchange rate.
The CBL should therefore clarify the current volume of Liberian dollars in circulation, the progress of its banknote procurement programme, and the effects of its monetary operations on commercial banks and businesses.
It should also explain the principal factors behind the recent appreciation and the measures being taken to ensure that consumers benefit from lower import costs where conditions permit.
TRANSPARENCY IS ESSENTIAL
Liberia’s stronger currency could offer economic benefits, but its success should not be measured by the exchange rate alone.
The availability of cash, price stability, access to banking services, and the purchasing power of ordinary citizens are equally important indicators of economic performance.
The IMF’s findings provide a legitimate basis for closer scrutiny of liquidity management and banknote availability. But any claim that the CBL is deliberately withholding Liberian dollars to manipulate the exchange rate remains unproven by the evidence cited here.
The Central Bank owes the public clear explanations and reliable data. Transparent reporting on currency circulation, cash availability, and monetary operations would help determine whether the current policy framework is strengthening the economy or creating unintended pressures for businesses and consumers.
The National Legislature should be meeting with officials of the Central Bank of Liberia (CBL) and other relevant sources behind closed doors to discuss critical monetary and financial issues. The availability and circulation of Liberian dollars should be among the key matters on the agenda.
