With claims and counter claims as to who gives the Central Bank of Liberia the authorization to print L$1000 bank notes, sources from the Liberian Senate have informed the Dakphannah24 News & Television that the National Legislature’s Joint Resolution of May 6, 2021, confirms that the Central Bank of Liberia (CBL) has been given the authority to print a new family of Liberian dollar currency in the value that includes a $1,000 single note, as well as in $500, $100, $50 and $20, with the $10 and $5 denominations in coins.
In recent times, the CBL, having the authority to print a L$1,000 denomination has been the central issue of discussion in many public quarters, with a few members of the National Legislature trying to legitimize the claim that the CBL has no authority to do so, as in fact they are yet to review the features and security content of the new L$1,000 bill.
However, it was confided in the this News Outlet by members of the Liberian Senate, who preferred anonymity, that after two hearings were conducted by the Joint Committee on Banking and Currency, Ways, Means and Finance, as well as Public Accounts and Judiciary, Human Rights, Claims and Petition of the National Legislature, all authorities and permissions were given to the CBL to go ahead to print the new family currency, including the $1,000 bank note.
According to the Joint Resolution,the denomination of bank notes to be printed shall be L$20, L$50, L$100, L$500 and L$1,000, and the denominations to be minted in coins shall be L$5 and L$10.
The Joint Resolution stipulated a number of measures to be put into place by the CBL prior to printing the new family of currency: that the CBL put in place adequate logistics and governance arrangements, including appropriate procedures, internal controls and compliance functions to ensure the integrity and transparency of the currency reform process; that the CBL draws up a detailed implementation plan that commensurates with its implementation capacities; that the CBL ensures effective internal and external financial and system audit as well as risk mitigating measures to safeguard the reform process and ensure full accountability; that the CBL arranges with the printers, make appropriate payment plan considering the budget of the bank, and financing gap of such plan discussed and concluded through a formalized arrangement with the Ministry of Finance and Development Planning (MFDP); and that given the national emergency of the need for Liberian dollar currency the CBL uses the appropriate procurement procedures in keeping with its Procurement Policy.
Furthermore, as measures to be put in place by the CBL precedent to the replacement of the currency, the Joint Resolution mandated that the CBL makes publicly available, on a monthly basis, pertinent information of the currency reform implementation, including data on the actual volume and value of currency imported, put into circulation, withdrawn from circulation and destroyed; that the replacement of the currency be done through the CBL, the commercial banks and designated financial institutions regulated and supervised by the CBL, with strict supervision and monitoring by the CBL; and that the CBL implements, in conjunction with the printer, plans that will mitigate counterfeiting of the new family of banknotes.
During this time of the year, for the past few years, it is observed that the demand for the Liberian dollar escalates to an unexpected level, apparently due to many individuals not trusting the banking system and, therefore, not willing for their money to remain with the banks until the Christmas season. Besides, it can be argued that there are more “susu” clubs in Liberia than banks; in fact, petty traders and civil servants, who make up the largest portion of the Liberian society, arguably trust these “susu” clubs than the banks. For this reason, many individuals would prefer to save with the “susu” clubs, which will, in turn, put the money in the banks for safe-keeping.
But because these “susu” clubs share the money with their members at the end of the year, they would start to withdraw their money by this time of the year to save themselves the embarrassment of “no money in the bank” or “the system is down”. They would then hold on to a huge portion of the Liberian dollars in order to share same with their members at the end of the calendar year, which creates the Liberian dollar shortage on the market.
Apparently taking this situation into consideration, the Joint Resolution has mandated the Central Bank to print the first L$4 billion (four billion Liberian dollars) in this year, all in L$100 denomination, as a way of beefing up the availability of the Liberian dollar on the market.