The Monetary Policy Committee (MPC) of the Central Bank of Liberia (CBL) has maintained the Monetary Policy Rate (MPR) at 16.25 percent, citing continued moderation in inflation.
The decision was taken at the Committee’s regular quarterly meeting held on January 28, 2026, during which members reviewed global and domestic economic developments in the fourth quarter of 2025 and assessed risks to inflation and growth for the first quarter of 2026.
According to the CBL, the policy stance reflects growing confidence that inflation will remain within the Bank’s single-digit target range while economic growth continues to strengthen.
Global Outlook Remains Resilient but Risk-Prone
The MPC noted that the global economy showed resilience in the fourth quarter of 2025. The International Monetary Fund (IMF), in its January 2026 World Economic Outlook, estimated global growth at 3.3 percent in 2025, with the same growth rate projected for 2026.
Despite the positive outlook, the Committee highlighted persistent downside risks, including geopolitical tensions, rising protectionism, fiscal sustainability challenges, tighter immigration policies, and potential financial market adjustments.
Global headline inflation declined to an estimated 4.1 percent in 2025 and is projected to ease further to 3.8 percent in 2026. However, Sub-Saharan Africa recorded the highest inflation rate at 13.3 percent, although moderation to 10.9 percent is expected in 2026.
Liberia’s Economy Posts Strong Performance
Domestically, the MPC expressed satisfaction with Liberia’s economic performance in the fourth quarter of 2025. Real GDP growth is estimated at 5.1 percent, revised upward from an earlier projection of 4.6 percent, supported by strong mining activity, sustained fiscal spending, and resilient private consumption.
Headline inflation averaged 4.4 percent during the quarter, down from 5.9 percent in the previous quarter, with end-period inflation at 4.0 percent. The decline was attributed to exchange rate stability, lower food and fuel prices, and subdued non-food inflation.
While inflation is expected to rise slightly in the first quarter of 2026 due to post-festive spending and increased foreign exchange demand for imports, the CBL projects it will remain within the target band, averaging about 4.8 percent.
Banking Sector Remains Stable
The Committee reported that the banking sector remains well-capitalized and liquid. The Capital Adequacy Ratio stood at 37.9 percent, far above the regulatory minimum of 10 percent, while the liquidity ratio reached 50.1 percent.
Although total loans and advances declined marginally, the Non-Performing Loans (NPL) ratio improved significantly, falling from 19.7 percent at end-December 2024 to 12.58 percent. Private sector credit grew by 3.8 percent during the quarter.
Exchange Rate and External Sector Improve
Liberia’s external position strengthened, with Gross International Reserves rising by 3.8 percent to US$575.5 million, exceeding the IMF target for 2025. The Liberian dollar appreciated by 0.9 percent at end-period and 7.8 percent on average during the quarter, supported by higher government U.S. dollar spending and increased remittance inflows.
The MPC acknowledged temporary depreciation pressures in early 2026 but expects them to be short-lived and remain within ECOWAS convergence thresholds.
Key Policy Decisions
The MPC unanimously resolved to:
Maintain the Monetary Policy Rate at 16.25 percent
Retain the interest rate corridor at +2.5 and −7.5 percentage points around the MPR; and
Keep reserve requirement ratios unchanged at 25 percent for Liberian-dollar deposits and 10 percent for U.S. dollar deposits.
The Committee emphasized that with inflation declining faster than expected and growth strengthening, policy focus will gradually shift toward consolidating stability gains and supporting stronger real-sector recovery.
The next Monetary Policy Committee meeting is scheduled for April 27, 2026.
