MONROVIA – 18 November 2021:The Board of Governors of the Central Bank of Liberia (CBL), agreed at its quarterly Monetary Policy Committee (MPC) meeting to retain the Monetary Policy Rate at 20% with an upper band of 500 basis points for standing credit facility as well as maintain the existing monetary policy measures of Reserved Requirement at 25% for Liberian dollars and 10% for United States dollars. The MPC’s decision was largely influenced by the current inflation rate of single digit and inflation expectations, the exchange rate dynamics for post festive demand of foreign exchange to facilitate imports, and the projected 3.6% growth target of the domestic economy for 2021, coupled with global economic developments and outlooks.


The Board took the decision at its fourth quarter MPC meeting convened at the CBL on 17th November 2021.


Global Macroeconomic Developments

The MPC noted the favorable implications on the Liberian Economy of the rise in the prices of exportable commodities to include coffee, palm oil and cocoa beans as well as the decline in the price of imported rice. In contrast, the decline in the prices of rubber and iron ore was a constraint on the domestic economy.


The rise in global inflation, partly fueled by the rise in the price of crude oil, is expected to have an effect on domestic inflation, the MPC noted.


The Domestic Economy

The MPC noted that the projections for domestic economic Real Gross Domestic Product (GDP) growth for the year 2021 remain unchanged at 3.6%, largely reflecting positive outlooks in the mining, agriculture & fisheries, and forestry subsectors. Prospects for growth in the manufacturing subsector also appear favorable, on account of increased production of cement and beverages. The service subsector, having been constrained by COVID-19 contraction, the MPC noted, is on course with recovery, as evidenced by the resumption of activities in the hospitality and other sectors.


The Banking Sector

The MPC noted an increase in the stock of bank loans in the tone of L$74.6 billion over the quarter ending September 2021, but that the bulk of the loans were concentrated in the trade, services, oil, and gas subsectors. However, MPC showed concerns for the persistently low concentration of loans to the agriculture and manufacturing subsectors and called for policy focus to support the two sectors, which are vital for spurring economic growth.


On the other hand, non-performing loans (NPLs), as noted by MPC, remained an issue of concern, with a rise by 2.1 percentage points in the third quarter.


Public Awareness

As a way of supporting financial sector stability and the economy at large, a nationwide public awareness campaign is now underway to inform the public about the currency reform process as well as engage relevant stakeholders on policies to sustain financial stability.