Monrovia, October 7, 2025 — The Central Bank of Liberia (CBL) has announced a reduction in its Monetary Policy Rate (MPR)—the key interest rate used to guide borrowing costs in Liberian dollars—from 17.25% to 16.25%. This decision was made during the latest meeting of the Monetary Policy Committee (MPC)- the group of experts at the Bank responsible for reviewing economic conditions and setting interest rate policies.
The rate cut is intended to provide support for continued economic growth and to also help keep prices stable, especially as inflation (the general rise in prices) continues to ease and the Liberian dollar shows signs of strength.
Why the Rate Was Cut
The MPC noted several encouraging trends:
- Inflation is falling. Headline inflation (overall price increases) dropped to 6.1% in the third quarter, down from 11.1% in the previous quarter. This was mainly due to lower food prices and cheaper imported goods.
- The economy is growing. Liberia’s economy is expanding, supported by increased government spending and strong private sector activity. The country remains on track to meet its annual growth target of 4.6% for 2025 from 4.0 percent in 2024.
- The Liberian dollar is stable. The exchange rate appreciated by 9.4% at the end of the quarter, helped by higher export earnings and increased remittance inflows, fiscal discipline and tight monetary policy.
- Global conditions are favorable: Falling global food and fuel prices, along with rising gold, iron ore and palm oil prices, have helped improve Liberia’s trade balance and foreign reserves.
What This Means for the Public
The reduction in the Monetary Policy Rate (MPR) means that borrowing costs for Liberian dollar loans may become more affordable, encouraging businesses and consumers to invest and spend more. However, this rate does not directly affect U.S. dollar interest rates, which are influenced by other factors.
The CBL also decided to:
- Maintain the interest rate corridor (the range around the MPR used to guide short-term interest rates) at +2.5 and -7.5 percentage points for standing credit and standing deposit facilities.
- Keep the reserve requirement ratio (the portion of deposits banks must keep at the Central Bank) unchanged at 25% for Liberian dollars and 10% for U.S. dollars.
The Central Bank reassures the public that it will continue to monitor both local and global economic conditions and take necessary actions to protect the economy from any unexpected shocks. The Bank remains focused on promoting price stability, supporting growth, and safeguarding the financial system.