CBL Blames Legislature for Liquidity Crunch

— Says legislature’s action to deny CBL request to print L$7 billion is the cause

Amid difficulties in receiving cash from commercial banks in Liberia due to shortage, the Central Bank of Liberia (CBL) has shifted the blame on the Legislature for the country’s current liquidity crunch, which has forced banks to ration daily cash-withdrawals.

In a press release, the CBL said the current financial crisis could have been avoided if the Liberian Legislature had approved their request to print L$7 billion.

The denial of that request, the CBL said, forced them to settle for L$4 billion which is accordingly inadequate to replace the current amount of mutilated banknotes and, at the same time, meet the liquidity demand in the banking system.

“In its effort to preempt this seasonal pressure, the CBL in 2019 forecast L$7.5 billion based on its analysis but was authorized to print only L$4.0 billion. This amount which was brought into the country in July this year, was inadequate to replace the current amount of mutilated banknotes and, at the same time, meet the liquidity demand in the banking system,” the CBL said in their press release.