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Low Export Prices, Ebola Stigma Hit Liberian Dollar In 2016
By Catherine B. Nyenkan
MONROVIA, April 3 (LINA) - The Central Bank of Liberia (CBL) has said the severe slump in the global prices of Liberia’s major export commodities and a lingering Ebola legacy put immense downward pressure on the value of the Liberian dollar against the United States dollar in 2016.
Executive Governor Milton A. Weeks made the disclosure in his foreword contained in the CBL 2016 annual report released recently.
He added that the downward pressure also yielded an estimated real Gross Domestic Product (GDP) growth of negative 0.5 percent for the year.
Weeks noted that despite those trying macroeconomic conditions, the CBL forged ahead with prudent liquidity management to contain annual average inflation within the single-digit range at 8.7 percent.
The apex bank Governor said the CBL also made efforts to smooth out exchange rate volatility with selective interventions into the foreign exchange market.
He said the CBL’s attempt to mitigate the exchange rate volatility fell below the total intervention for 2015 due mainly to the CBL reserve accumulation policy.
He said despite the challenges described, the financial sector continued to expand and remain relatively resilient.
Governor Weeks explained that the total credit to all sectors of the economy grew by 11.3 percent during the year due mainly to a resumption of economy activities in key sectors.
According to th governor, the gradual improvements in the energy sector and in farm-to-market and other roads triggered this development which saw the private sector capture 97.3 percent share of and total credit.
Weeks noted that this reflects a growing contribution of the private sector as a driver of balance sustainable economic growth.