Central Bank of Newsletter Central Bank of Liberia Newsletter

March 2011 Central Bank of Liberia www.cbl.org.lr Volume 3, Number 1 TOPICS CARRIED IN THIS EDITION GOVERNOR’S FOREWORD: INTENSIFYING OUTREACH TO LIBERIAN SMALL AND MEDIUM-SCALE • Governor’s Foreword: Intensifying Out- reach to Liberian (Small and Medium- Scale Enterprises (SMEs) ENTERPRISES (SMEs)

• Exchange Rate Continues to be Broadly Stable: CBL Intervention in First Quarter A key characteristic of a mote sustained eco- of 2011 Totaled US$8.6 Million flourishing and growing nomic growth, the CBL • Remittances on the Rise economy is a strong established the Microfi- SME sector. SMEs play nance Unit and recently • Inflation: Data for First Two Months of an important role in the launched the US$5.0 2011 Compare Favorably with Countries of the Region development of a coun- million medium-term try. The benefits SMEs stimulus package in sup- • Liberia Meets all Four Primary Conver- gence Criteria of the West African Single provide are easily no- port of Liberian-owned Currency Program in First Half of 2010— Only Country in the Zone to do so ticeable: they contribute businesses. Dr. J. Mills Jones to the economy’s output Executive Governor • CBL External Auditors Express an Un- qualified (Clean) Opinion on the 2010 of goods and services; Efforts by the CBL to Financial Statements create jobs at relatively improve access to credit • Microfinance Loan Portfolio Exceeds low cost; provide a vehi- for SMEs need to be The CBL has reached out US$13.0 Million with Active Clients of More Than 59,000 cle for reducing income complemented by ac- to representatives of the disparities; create oppor- tions on the part of other Concern Liberians Inter- • Performance of the Banking Sector: Private Sector Lending up by 30.6 % from tunities for developing government agencies national Business Or- February 2010 , but Concern about Non- Performing Loans Remains and adapting appropriate and other partners in the ganization (COLINBO), technology; engender area of capacity building the Fulla Business Asso- • Promoting Greater Disclosure by Com- mercial Banks to Protect Customers entrepreneurial and for such enterprises, the ciation and the Liberian

• Expansion of Banking Services managerial talent, the limitation of which is a Business Association Continues: Number of Branches Around the Country Now Stands at absence of which is of- major stumbling block to (LIBA). The CBL has 72, Covering 10 Counties ten an impediment to the development of this also opened communica- economic development, sector. tion with some of the fur- • Promoting Finance Lease in the Country etc. niture makers. There is a Meanwhile, it should be need for unity among the • Reforming the Foreign Exchange Sector The Liberian SME sec- noted that there is steady various business associa- • CBL Hosts Workshop on Customer Pro- tor, with the proper sup- progress with the micro- tions to be able to more tection in Collaboration with the United Nations Capital Development Fund port, has the potential to finance sector. The loan effectively present their (UNCDF) reinforce growth outside portfolio of microfi- concerns and ideas to the of the enclave sector and nance institutions now government and develop- • CBL to Benefit from Technical Assistance from First Initiative / World Bank strengthen the basis for stands at more than ment partners, as well as the private sector to US$13 million, and the develop programs for • The CBL Engages Commercial Banks to Enhance the Credit Stimulus Initiative serve as the engine of client base has grown themselves for capacity growth for the economy. from about 8,000 in building. • CBL is Poised to Completing the Installa- tion of a New Financial Reporting 2007 to about 59,324. Software It is recognized that a The employment effect • CBL’s Payments System Development major challenge facing in the informal sector is Project micro, small and me- significant. Encouraged • CBL Ensures Better Quality Banknote in Circula- dium-scale enterprises is by this experience, we tion—No Need for the Public to Discount Muti- lated Notes access to credit. The are looking to see what CBL has been trying to the CBL can do to in- • Afriland First Bank Begins Operations deal with this problem. crease financing for mi- • Strengthening Capacity for Timely and Improved Compilation of Balance of Being mindful of its re- cro businesses at reason- Payments Statistics sponsibility to help pro- able cost.

Central Bank of Liberia Newsletter Page 2 EXCHANGE RATE CONTINUES TO BE BROADLY STABLE: CBL INTERVENTION IN FIRST QUARTER OF 2011 TOTALED US$8.6 MILLION

The broad exchange rate stability experi- is driven, in part, by CBL’s intervention in market. A liquidity monitoring framework enced during 2010 continued into the first the market for foreign exchange where the has been developed, to inform decision mak- quarter of 2011, with the buying rate stand- amount of US dollars offered by the Bank ing relative to the level of intervention in the ing at L$71.8/US$1 and L$72.7/US$1 for through the auction increased by US$12.8 market. The framework has provided the selling. This trend of exchange rate stability million to US$US$44.6 million at end- basis for forecasting liquidity. Continued December, 2010, efforts will be made by the CBL towards from US$31.8 million enhancing its forecasting ability. in 2009. The CBL’s Research Department The level of CBL’s intervention in the market monitors the ex- for the first quarter of 2011 totaled US$8.6 change rate on a daily million, US$9.0 million less than the amount basis in order to keep offered for the same period in 2010. The track of ongoing de- reduction in the amount offered can be pri- velopments in the marily ascribed to the broad stability in the foreign exchange exchange rate.

REMITTANCES ON THE RISE accounted Aggregate remittance inflows at end- March for by 2011 totaled US$274.9 million, rising by workers’ US$40.1 million or 17.1 percent over the remittance level recorded at end- March 2010. This inflows. increase in US dollar flows to the economy is one of the factors that have been contrib- uting to the stability of the exchange rate. Of the aggregate remittance inflows for the first quarter of 2011, US$110.3 million is

INFLATION: DATA FOR FIRST TWO MONTHS OF 2011 COMPARE FAVORABLY WITH COUNTRIES OF THE REGION

Consumer Price developments indicate a erate inflationary condition are mainly the showed a lower rate of 5.4 percent for the relatively stable inflationary condition as the global increase in the price of oil and food same period. quarterly, average rate of inflation for the prices. quarter ending March 31, 2011, marginally Inflation rate in 2011 will depend mainly on Table 5: Year-on-Year Rates of Inflation increased by 0.5 percentage point to 6.2 per- current developments relative to the prices of (January, 2010– March, 2011) cent, from 5.7 percent in the preceding quar- food and oil on the world market. A contin- (December 2005 =100) ter. Sub-groups that contributed to the slight ued rise in prices of these items has implica- increase in movement of the general price tion for higher inflation, given the domestic Month 2010 2011 during the first quarter, 2011 included Food economy’s heavy reliance on these imported January 12.9 4.7 & Non-Alcoholic Beverages (9.03 percent); items. February 11.5 7.5 Alcoholic Beverages, Tobacco and Narcotics (11.01 percent); Furnishings, Household Inflation in Liberia stood at 7.5 percent at end March 13.2 6.5 Equipment and Routine Maintenance of the -February 2011, compared with Ghana, 9.2 April 11.9 House (-3.09 percent); Transport (10.86 per- percent; Sierra Leone, 16.6 percent; and Ni- May 8.0 cent); Recreation and Culture (1.60 percent). geria, 11.1 percent. However, The Gambia Inflation in the econ- June 2.5 omy, during the quar- July 4.2 ter, was driven by August 3.3 Transport (which has as its components September 5.2 diesels, gasoline, taxi October 4.9 fare, bus fare, and November 5.7 wheelbarrow trans- port), and Food and December 6.6 Non-alcoholic Bever- Average Rate 7.5 ages. Key factors of Inflation influencing the mod- Central Bank of Liberia Newsletter Page 3

LIBERIA MEETS ALL FOUR PRIMARY CONVERGENCE CRITERIA OF THE WEST AFRICAN SINGLE CURRENCY PROGRAM IN FIRST HALF OF 2010— ONLY COUNTRY IN THE ZONE TO DO SO The 24th Meeting of the Committee ratio less than or equal to 4 percent, the commercial court and develop- of Governors and the 27th Meeting of (3) central bank financing of fiscal ment of a framework for a credit ref- the Convergence Council of Minis- deficit less than or equal to 10 per- erence bureau are quite commend- ters and Governors of central banks cent of the previous year’s revenue able; prudent monetary and disci- of the West African Monetary Zone and (4) gross external reserves posi- plined fiscal behaviors of the authori- (WAMZ) were held in Abuja, Nige- tion relative to months of import ties made it possible for the country ria, on February 10 – 11, 2011. The cover must be equal to or greater to attain and sustain all the four pri- purpose of the meetings, among than 3 months of import cover. In mary and two secondary criteria, and other things, was for participants to addition, according to the Report, that, in the medium term, Liberia is review and deliberate on the status of Liberia also met two (2) secondary likely to maintain its performance on Performance Report prepared by the criteria from amongst a total of six the primary criteria. However, the West African Monetary Institute (6). The 2 secondary criteria met in- Liberian economy still faces signifi- (WAMI) on individual member clude tax revenue/GDP ratio greater cant challenges that must be ad- countries of the WAMZ with regard than 20 percent and salary mass/total dressed, according to the Report. to meeting and sustaining the various tax revenue ratio less than 35 per- primary and secondary convergence cent. This means that Liberia met 6 The meetings were organized by criteria as required under the imple- of the total number of 10 conver- WAMI in collaboration with the mentation plan of the single currency gence criteria during the first half of Central Bank of Nigeria. WAMI is a program, as well as to assess the 2010, compared with Sierra Leone, specialized agency of ECOWAS macroeconomic performance of the 2; The Gambia, 5; Ghana, 4; , which focuses on issues relative to WAMZ countries as a zone in the 2, and Nigeria, 7. the implementation of the West Afri- context of the program during the can single currency program. At- first half of 2010. In conclusion, the Report highlighted tending the meetings were the Gov- the following: that the Liberian au- ernors of the Central Banks of Libe- The WAMZ Macroeconomic Devel- thorities took necessary steps to sus- ria, Sierra Leone, Guinea, Nigeria, opments and Convergence Report tain the momentum of economic re- Ghana and The Gambia. Also in was the focus of the deliberations forms that aim at achieving poverty attendance were the ministers of during the meetings. On the assess- reduction and other millennium de- Commerce and Industry of Liberia ment of the WAMZ countries, the velopment goals; the government and Nigeria, Ministers of Finance Report indicated that, of the six embarked on reconstruction and re- and Economic Affairs of The Gam- countries of the WAMZ, Liberia was habilitation of socio-economic infra- bia, Ghana, Guinea, Nigeria and Si- the only country that met all of the structure destroyed during the civil erra Leone. Those attending as ob- four (4) primary convergence criteria conflict, and that the various initia- servers included representatives of relative to the single currency pro- tives by the CBL to promote finan- the ECOWAS Commission, WAMA, gram during the first half of 2010. cial system soundness and growth WAIFEM, BCEAO and UEMOA. These criteria include (1) a single are in the right direction; efforts digit inflation, (2) fiscal deficit/GDP made towards the establishment of LI S CBL EXTERNAL AUDITORS EXPRESS AN UNQUALIFIED (CLEAN) OPINION ON THE 2010 FINANCIAL STATEMENTS

CBL external auditors from Pricewa- dance with International Financial through the office of the President of terhouseCoopers-Ghana have com- Reporting Standards”. Additionally, Liberia. The financial statements will pleted the audit of the Bank’s 2010 in the management report submitted also be posted on the Bank’s website IFRS financial statements. In the to the Board Audit Committee, the at www.cbl.org.lr. auditors’ opinion “the financial state- auditors mentioned that “nothing ments give a true and fair view of the came to our attention that indicates position of the Central Bank of Libe- any suspected or actual fraud during ria as at December 31, 2010 and of the audit”. Copies of the audited its financial performance and cash financial statements have been sub- flows for the year ended in accor- mitted to the Government of Liberia Central Bank of Liberia Newsletter Page 4

• EXCHANGE RATE AND PRICE MICROFINANCE LOAN PORTFOLIO EXCEEDS US$13.0MOVEMENTS MILLION WITH • LIBERIA EXPRESSES INTEREST TO ACTIVE CLIENTS OF MORE THAN 59,000 JOIN THE WAMZ • WHY DO CENTRAL BANKS HOLD The number of active clients benefit- series of institutional assessments of increaseRESERVES access? to financial services, ing from Microfinance services as at all registered microfinance institu- and• to IMFdevelop MISSION an V ISITSappropriate TO LIBERIA regula- December ending 2010 was 59,327, tions that would provide diagnostics tory and supervisory framework. • DEVELOPMENTS IN THE BANKING while the outstanding loan portfolio of their operations, performance and SECTOR stood at US$13,374,364.00 up from service delivery in order to identify The• HeadCBL AandDOPTS DeputyRISK-BASED Head of the US$8,117,483.00 as of September problems and necessary actions MicrofinanceSUPERVISION Unit along with a Bank 2010. Of this amount, AccessBank needed for them to become self- Examiner• CBL HfromOLDS WtheORKING Supervision LUNCHEON De- accounted for US$8,742,834.00 or sustaining. The Unit has so far con- partmentWITH and COMMERCIAL the Chief BANKS Technical Ad- 65.4 percent and 8 credit-only micro- ducted preliminary assessments on visor• onEXCERPTS Microfinance FROM THE EXECUTIVE undertook a finance institutions accounted for Local Enterprise Assistance Program week-longGOVERNOR study’S SPEECH tour to Malawi, US$4,562,116.00 or 34.6 percent. (LEAP) and BRAC Liberia Microfi- where• TtheyHE CBL obtained TO ACQUIRE a N EWbetter under- The average loan size for the credit- nance Company. The process is on- standingFINANCIAL of both R EPORTINGregulating SOFTWARE and super- only institutions is US$96.00. Mi- going. vising• MMicrofinanceODERNIZATION OF PDepositAYMENTS Taking SYSTEM crofinance is therefore having a sig- Institutions and Credit Unions. The • ESTABLISHMENT OF TRANSITORY nificant impact on employment in the Also, the reactivation and moderni- team alsoACCOUNTS studied AT C issuesOMMERCIAL related BANKS to the informal sectors because these active zation process of the credit union establishment of a vibrant financial • THE CBL INTRODUCES ELECTRONIC clients are not only provided with a movement in Liberia is underway, infrastructure,STATEMENTS including (E-STATEMENTS the) Credit means of income, but in many cases seeking to reorganize and modernize Reference• THE CBLBureau, RESTRUCTURES Microfinance THE Net- they have employed other family the Liberia Credit Union National work, VillageBANKING DSavingsEPARTMENT Loan Associa- members and friends to work with Association (LCUNA); and affiliated tions• (VSLAs)NEW ADMINISTRATION and Branchless DIRECTOR Bank- them. credit unions in the country to make ing.• NEW PUBLIC RELATIONS OFFICER them viable and sustainable. In the • NEW RECRUITMENT FROM LOCAL Meanwhile, the Central Bank of Li- process of restructuring, a revitaliza- UNIVERSITIES beria (CBL) has embarked on taking tion workshop is scheduled to be • CAPACITY BUILDING positive steps in order to make Mi- held in Ganta, Nimba County, to • CBL LAUNCHES INTRA AND E-MAIL crofinance Institutions (MFIs) in the draw up a 3-year business plan pro- SYSTEM country self-sustainable. The Micro- moting the credit union model, seek- • CBL LAUNCHES MICROFINANCE finance Unit of the CBL has begun a ing to support a strategic approach to REGULATORY AND SUPERVISORY FRAMEWORK FOR LIBERIA

• GRAND CAPE MOUNT, MARYLAND AND SINOE COUNTIES TO BENEFIT PERFORMANCE OF THE BANKING SECTOR: PRIVATE FROMSECTOR THE LAUNCH LENDINGOF VILLAGE SAV- UP BY 30.6 PERCENT FROM FEBRUARY 2010, BUT CONCERNINGS SCHEME ABOUT • OFFICIAL SIGNING OF PHASE II OF AN NON-PERFORMING LOANS REMAINS INCLUSIVE FINANCIAL SECTOR IN LIBERIA The banking sector continues to record ing system continues to be resilient and contracts,• CREATION and OF StheECURED new ENVIRON- Commercial MENT FOR LENDING steady growth in total assets, loans, stable, and is contributing to economic Code, it is hoped that there will be deposits and capital. During the first growth and development of Liberia. some• LimprovementIBERIA’S ROLE IN GIABAin the credit envi- two months of 2011, the deposit base However, ratio of non-performing ronment• LEASE and FINANCING culture in the Country. increased by 3.0%, gross loans in- loans (NPLs) to total loans as at Febru- This• wouldBOARD A helpUDIT CinOMMITTEE enhancing AND I N-the prof- creased by 7.5% and total assets in- ary 2011 was reported at 28.5%, repre- itabilityVESTMENT of the COMMITTEES sector and promote creased by 4.0% when compared to the senting an increase of 17.5 percentage lending• USAID/US to the TprivateREASURY sector. MISSION VIS- December 2010 data. From February points over February 2010 data. The ITS LIBERIA 2010 to February 2011, total assets issue of NPLs, though improved over • CBL GOVERNOR BECOMES BANKER increased by 34.4%, total deposits by the years, remains one of the key chal- OF THE YEAR 2009 38.2% and capital up by 23.9%. For lenges in the banking industry, imped- the same period, loans, 99% of which ing the profitability of the sector and is private sector lending, went up by posing a potential threat to the growth 30.6% from February 2010. In terms of lending to the private sector. of liquidity ratio and capital adequacy With the improvement in the risk man- ratio (CAR) as at February 28, 2011, agement systems in the commercial the industry recorded 46.9% and banks coupled with the establishment 28.5%, respectively. of a special Commercial Court to en-

These growth rates show that the bank- sure a timely adjudication of financial Central Bank of Liberia Newsletter Page 5

PROMOTING GREATER DISCLOSURE BY COMMERCIAL BANKS TO PROTECT CUSTOMERS

The CBL has amended its existing within their banking premises so as to loan customers with a complete repay- directive “Concerning Display of In- provide customers with adequate infor- ment schedule, indicating the amounts terest Rates and Computation of Lend- mation to enable them make the right and due dates of periodic payments. ing Rates.” This directive is intended decisions with regard to the cost of These efforts are geared toward pro- for banks to display lending and de- borrowing and returns on savings. It is moting transparency and competition posits rates at conspicuous locations also intended for banks to provide their in the banking system.

EXPANSION OF BANKING SERVICES CONTINUES: NUMBER OF BRANCHES AROUND THE COUNTRY NOW STANDS AT 72, COVERING 10 COUNTIES

In continuation of its drive to encour- other bank branches, the branch in Si- support the Government’s poverty re- age the expansion of banking services noe and the proposed branch in Bu- duction strategy. These new branch to all parts of the country, the CBL has chanan, will provide a range of finan- operations will bring the total number given approval for a commercial bank cial services to the local population of bank branches around the country to to commence construction activities in covering the direct deposit scheme, 72 and the number of counties with Buchanan, Grand Bassa County, a money transfers, credit extension and bank presence to 10. These include: county that already enjoys the pres- deposit mobilization. The approval of Montserrado, Cape Mount, MarGibi, ence of four other banks. Banking ser- bank branches throughout the country Grand Bassa, Bong, Lofa, Nimba, vices have commenced in Sinoe is in keeping with the CBL’s policy to Grand Gedeh, Maryland and Sinoe County in addition to the CBL existing promote access to financial services to counties. payment center in the county. Like all segments of the population and to PROMOTING FINANCE LEASE IN THE COUNTRY The CBL, in collaboration with the nance Corporation (IFC) in develop- equipment and physical capital criti- International Finance Corporation ing the leasing market in Liberia as a cal to the development of the SME (IFC), hosted two series of workshop complementary financial product to sector and support the reconstruction in February and March with the ob- traditional bank loans. The CBL has of the country. jective of developing the skills of already developed a finance lease staff of the commercial banks and the regulation that will provide the gen- CBL in finance lease activities. The eral framework for the commercial workshops were part of the technical banks to engage in finance lease. Fi- assistance that the CBL continues to nance lease will allow banks to di- receive from the International Fi- rectly finance the purchase of needed REFORMING THE FOREIGN EXCHANGE SECTOR The CBL has developed a reform representative and broad-based. In ad- mum deposit requirements and incen- agenda for foreign exchange activities dition, the CBL has developed a re- tive packages for each category. The in the Country, following a series of form agenda for the sector with the reform measures will be implemented consultative meetings with the leader- objective of building strong and viable in stages within specified timeframes ship and members of the Foreign Ex- foreign exchange bureaux in the coun- up to end-January, 2012. change Bureau Association and other try. The reform agenda include (1) interested parties, with the aim of mod- upgrading the existing guidelines for ernizing the activities of foreign ex- regulating and supervising foreign ex- change bureaux. change business; (2) re-licensing all existing bureaux in keeping with the Part of the reform is the now- new guidelines and requirements effec- completed restructuring of the Asso- tive May 1, 2011; and (3) the classifi- ciation of Foreign Exchange Bureaux cation of foreign exchange operators of Liberia (AFEBL) to make it more into two categories with separate mini- Central Bank of Liberia Newsletter Page 6

CBL HOSTS WORKSHOP ON CUSTOMER PROTECTION IN COLLABORATION WITH THE UNITED NATIONS CAPITAL DEVELOPMENT FUND (UNCDF)

The Microfinance Unit of the Central sector of Liberia, included participants sible pricing; appropriate collection Bank of Liberia, in collaboration with from CBL, Liberty Finance, LEAP, practices; ethical staff behavior; com- the United Nations Capital Develop- Combined Effort to Assist Liberians plaints handling and resolution; pri- ment Fund (UNCDF), conducted a two (CEAL), Foundation for Women- vacy of client data; and other dimen- -day workshop on Client protection Liberia (FFWL), Community Liveli- sions of client protection. from April 7-8, 2011. hood Assistance Program (CLAP), BRAC Microfinance Company, Libe- The workshop, which was designed to ria Entrepreneurial & Assets Develop- enhance participants’ understanding of ment (LEAD), MoF and UNCDF. the mechanics and importance of cus- Topics covered were: over- tomer protection in the microfinance indebtedness; transparency and respon-

CBL TO BENEFIT FROM TECHNICAL ASSISTANCE FROM FIRST INITIATIVE/WORLD BANK

The FIRST Initiative has approved a mented soon will cover the insurance by the FIRST Initiative for the devel- technical assistance package to de- sector, specialized credit institutions, opment of a capital market in Liberia. velop a regulatory and supervisory deposit-taking MFIs, etc. The assis- framework for non-bank financial in- tance will also cover hands-on training stitutions in Liberia. The technical as- of staff of the CBL. Technical assis- sistance which is expected to be imple- tance package has also been approved THE CBL ENGAGES COMMERCIAL BANKS TO ENHANCE THE CREDIT STIMULUS INITIATIVE

The CBL recently met with the commer- increase their outreach with regard to the as a way of enhancing their domestic pro- cial banks to discuss the framework for credit stimulus initiative to other parts of duction capacity. It can be recalled that a enhancing the credit stimulus initiative and the country, particularly the leeward coun- few months ago, in an effort to address one to emphasize the need to reach out to the ties. Some of the banks have commenced of the many challenges facing micro, small priority sectors, which include soap- granting credits to the above-named sec- and medium-sized enterprises, the CBL making, shoe-repairing, carpentry/furniture tors, while others have received and are launched the SME Credit Stimulus Initia- -making, small holder farmers and farming reviewing applications. tive with a view to creating a better matur- cooperatives, fishery, etc. ity structure for loans to Liberian-owned The intent of CBL’s focus to these sectors SMEs and to making the cost of credit to The CBL has also requested the banks to is to enable them to have access to finance such SMEs more affordable. CBL IS POISED TO COMPLETING THE INSTALLATION OF A NEW FINANCIAL REPORTING SOFTWARE The installation of Microsoft Dynamics flow Analysis. The Gap analysis discus- Services Section. This is to be followed Great Plains Financial Reporting Soft- sions did not identify any unsupported by a full data migration process and end ware is in progress. In January 2011, area for the installation of the software. users training. According to the project members of CBL Core Software Imple- Additionally, all the migration templates implementation plan, the entire installa- mentation Team completed a two-week have been completed and loaded in the tion exercise is expected to be completed training at Rhema Headquarters in Ac- software which has been installed on a in May 2011. cra, Ghana. At the end of the training, a new 2008 server and also deployed on Gap Analysis conference was held to several work stations in the Finance De- evaluate the needs of the Bank using the partment, Internal Audit, Human Re- standard Microsoft Great Plains Work- source Management Section and General Central Bank of Liberia Newsletter Page 7

CBL’S PAYMENTS SYSTEM DEVELOPMENT PROJECT

Following the launching of the payments project. The CBL also identified key Meanwhile, the project governance system development project in Decem- locations in Monrovia and its environs structure includes the Steering Commit- ber 2010, the CBL sponsored a study which will be used to build the infra- tee, Project Coordinator, Heads of Vari- tour in the West African Monetary Zone structure that will serve as the main and ous Project Components, and the Na- countries where similar initiatives are backup sites for the payments system. tional Payments System Committee, all ongoing for staff who will be responsible An important next step will be to set up a of which have already been set up. for managing core components of the Payments System Unit within the Bank.

CBL ENSURES BETTER QUALITY BANKNOTES IN CIRCULATION—NO NEED FOR THE PUBLIC TO DISCOUNT MUTILATED NOTES A Currency Management Unit has exchange mutilated banknotes for tion and help to strengthen public confi- been established in the Banking De- cleaner notes at no cost to the holders. dence in the domestic currency. The partment that has the responsibility, Mutilated Liberian banknotes can also public is advised to take their mutilated among others, to ensure that better be deposited at commercial banks for banknotes to the CBL or commercial quality Liberian dollar banknotes are cleaner notes at face value at no costs banks. in circulation. The CBL has also main- or fees. The exercise is intended to tained its windows to the general pub- retrieve the quantity of mutilated bank- lic from Monday to Friday weekly to notes (or tear-tear money) in circula-

AFRILAND FIRST BANK BEGINS OPERATION The Central Bank of Liberia on March Tome & Principe, and , and CBL’s policy to improve access to 7, 2011, granted a final license to Afri- two business offices in Paris, France financial services to all viable sectors land First Bank Liberia Limited and in , China. The entry of of the economy and to put the banking (AFBLL), a subsidiary of Afriland AFBLL in the banking system brings sector in a stronger position to meet First Group, a financial holding com- to 9 the total number of commercial the genuine financing needs of the pany registered in Switzerland, and has banks operating in Liberia. economy. In addition to providing nor- several subsidiaries and business of- mal commercial banking services, fices in , , The licensing of Afriland First Bank ABLL will also focus on lending to the Democratic Republic of Congo, Sao Liberia Limited is in furtherance of the agricultural and SME sectors.

STRENGTHENING CAPACITY FOR TIMELY AND IMPROVED COMPILATION OF BALANCE OF PAYMENTS STATISTICS The CBL, in its quest to strengthen the flows, and the overall coverage of the ery. The CBL has been compiling BOP capacity of relevant staff of the Bank financial account, as well as discuss statistics on an annual basis. for timely and improved compilation with the staff of the Research Depart- of the Balance of Payments (BOP) ment the merits of international trans- Liberia’s BOP was compiled for the Statistics, requested and received an action reporting system (ITRS), in- first time in 2008, after a period of 21 IMF BOP Statistics Mission from cluding issues relating to coverage and years as a result of the civil conflict. March 28 – April 9, 2011. The main implementation. This means that the BOP compilation objectives of the mission were to en- system and practice are still develop- hance capacity of the staff of the BOP At the end of the mission, the CBL and ing, and while significant progress has Unit relative to appropriate BOP data the mission agreed that henceforth, the been made, more work needs to be sources, methodology, BOP statistics Bank will compile the BOP statistics done relative to the timely collection of compilation practices, identification of on a quarterly basis prior to the annual data from data providers, addressing areas for improvement such as quality submission to the IMF. This will fur- issues of methodology in the context of of data collected on services, foreign ther enhance the capacity of staff of classification of some items, and im- direct investment, import of goods as- the BOP Unit of the Research Depart- proving the compilation framework. sociated with foreign direct investment ment and take the BOP statistical com- projects, remittances, investment in- pilation process in a new direction for come, development aid and associated improving accuracy and timely deliv- Central Bank of Liberia Newsletter Page 8

THE PUBLIC CAN COME DAILY WITH MUTES (I.E., TEAR-TEAR MONEY) IN EX- CHANGE FOR BETTER QUALITY LIBERIAN DOLLAR BANKNOTES AT THE CENTRAL BANK OF LIBERIA. THIS CAN ALSO BE DONE AT ANY COMMERCIAL BANK.

THE CENTRAL BANK OF LIBERIA CONDUCTS A WEEKLY FOREIGN EXCHANGE SALE AUCTION AT 10:00 A.M. ON EVERY WEDNESDAY AT ITS TRAINING CENTER AT THE CORNER OF WARNER AND CAREY STREETS. THE AUCTION IS PRINCIPALLY INTENDED TO HELP ENSURE STABILITY OF THE EX- CHANGE RATE BY PROVIDING FINANCIAL RESOURCES TO THE NATIONAL ECONOMY, PARTICULARLY IN HELPING TO FACILITATE IMPORTATION OF GOODS AND SERVICES AND TO PROMOTE ECONOMIC GROWTH AND DEVEL- OPMENT. AS IN RECENT YEARS, THE CBL FOREIGN EXCHANGE AUCTION HAS HELPED TO MAINTAIN BROAD STABILITY OF THE EXCHANGE RATE FOR MOST PART OF 2010.

ANYONE OR INSTITUTION WISHING TO PARTICIPATE IN THE WEEKLY AUCTION CAN DO SO BY SUBMITTING A BID OR APPLICATION TO THE CENTRAL BANK’S DEPARTMENT OF BANKING THROUGH ANY OF THE COM- MERCIAL BANKS WITH WHICH THE PARTICIPANT OR APPLICANT MUST HAVE AN ACTIVE OR FUNCTIONAL LIBERIAN DOLLAR ACCOUNT TO FACILI- TATE SETTLEMENTS ARISING FROM THE AUCTION.