The Central Bank of Liberia (CBL) has decided to hold its Monetary Policy Rate (MPR) steady at 17.25%, signaling continued efforts to contain inflation and stabilize the Liberian dollar amidst global and domestic economic pressures.
The decision came following the Bank’s third Monetary Policy Committee (MPC) meeting of the year on July 16, where policymakers concluded that maintaining a tight monetary stance was critical to protecting the purchasing power of Liberians and ensuring price stability.
CBL Executive Governor Henry F. Saamoi explained the rationale behind the move, stating, “We understand the pressure rising prices place on Liberian households. By holding the policy rate steady, we are working to keep inflation in check and ensure that the Liberian dollar remains stable.”
Fighting Inflation, Supporting Stability
The MPR is the rate at which the CBL sells its short-term financial instruments, the CBL bills, to commercial banks and retail investors. It directly influences the cost of borrowing and savings interest rates.
By keeping this rate well above the inflation rate, the Bank aims to reduce excess money in the economy, slowing down inflation and supporting the value of the local currency.
In practical terms, this means while loans may remain expensive for businesses and individuals, the CBL is prioritizing the broader goal of economic stability-especially as consumers struggle with rising prices for food, fuel, and transportation.
Key Policy Measures Unchanged
In addition to keeping the MPR unchanged, the Bank also maintained other key monetary tools:
The interest rate corridor remains at +2.5 and -7.5 percentage points around the MPR.
Reserve requirements for commercial banks are steady at 25% for Liberian dollar deposits and 10% for U.S. dollar deposits.
These steps are aimed at tightening liquidity and strengthening the overall financial system.
Economy Shows Signs of Progress
Despite global uncertainties, Liberia’s economy has shown signs of resilience. According to the CBL:
Inflation fell to 11.1% in the second quarter of 2025, down from 12.5% earlier in the year.
GDP growth reached 4.3% for the second quarter, with hopes of hitting a 5.6% growth target by year-end. Remittances increased by 11.4%, helping to stabilize the exchange rate.
The banking sector remains stable, though non-performing loans remain high at 26.7%.
Governor Saamoi noted the cautious optimism among policymakers.
“We are encouraged by the signs of economic growth and the easing of inflation. But we remain cautious. Global uncertainties and falling export prices mean we must stay vigilant and proactive.”
Push to Strengthen the Liberian Dollar
Looking forward, the CBL is advocating for greater use of the Liberian dollar in both public and private transactions.
It is also promoting the Pan African Payment and Settlement System (PAPSS), which enables cross-border trade using local currencies-including the Liberian dollar.
Additionally, the Bank is encouraging exporters to channel earnings through local banks, a move designed to boost foreign currency reserves and reduce dependence on the U.S. dollar.
A Message to the Public
Governor Saamoi concluded with a message of reassurance: “We are committed to building a resilient economy that works for all Liberians. That means making tough but necessary decisions today to secure a more stable tomorrow.”
The Central Bank says it will continue to monitor both domestic and global economic trends and will take action when needed to protect Liberia’s financial stability and promote long-term growth.
