Central Bank of Liberia Annual Report 2018 Central Bank of Liberia Annual Report January 1 to December 31, 2018 © Central Bank of Liberia 2018 This Annual Report is in line with part XI Section 49 (1) of the Central Bank of Liberia (CBL) Act of 1999. The contents include: (a) report on the Bank’s operations and affairs during the year; and (b) report on the state of the economy, which includes information on the financial sector, the growth of monetary aggregates, financial markets developments, and balance of payments performance. i | P a g e Central Bank of Liberia Annual Report 2018 CENTRAL BANK OF LIBERIA Office of the Executive Governor January 25, 2019 His Excellency Dr. George Manneh Weah PRESIDENT Republic of Liberia Dear President Weah: In accordance with part XI Section 49(1) of the Central Bank of Liberia (CBL) Act of 1999, I have the honor on behalf of the Board of Governors and Management of the Bank to submit, herewith, the Annual Report of the Central Bank of Liberia to the Government of Liberia for the period January 1 to December 31, 2018. Please accept, Mr. President, the assurances of my highest esteem. Respectfully yours, Nathaniel R. Patray, III P.O. BOX 2048, LYNCH & ASHMUN STREETS, MONROVIA, LIBERIA Tel.: (231) 555 960 556 Website: www.cbl.org.lr ii | P a g e Central Bank of Liberia Annual Report 2018 Table of Contents ACRONYMS ............................................................................................................................... i FOREWORD ............................................................................................................................. iv VISION, MISSION AND GOALS. ........................................................................................... vi HIGHLIGHTS .......................................................................................................................... ix The Board of Governors ..............................................................................................................1 The Management ....................................................................................................................... 2 Chapter 1: Governance and Organizational Structure ................................................................ 3 1.1 The Board of Governors................................................................................................... 3 1.2 Committees of the Board ................................................................................................. 3 1.3 Policy Decisions by the Board ........................................................................................ 5 Chapter 2: The Global Economy ................................................................................................ 7 2.1 World Output Growth ...................................................................................................... 7 2.2 Global Inflation ................................................................................................................ 8 2.3 Commodity Markets ........................................................................................................ 9 2.3.1 Crude Oil ....................................................................................................................... 9 2.3.2 Iron Ore ......................................................................................................................... 9 2.3.3 Rubber ........................................................................................................................... 9 2.3.4 Palm Oil ...................................................................................................................... 10 2.3.5 Cocoa Beans ............................................................................................................... 10 2.3.6 Rice .............................................................................................................................. 10 Chapter 3: Developments in the Liberian Economy ................................................................. 12 3.1 Overview ......................................................................................................................... 12 3.2 Real Sector Performance ...................................................................................................... 14 3.3 Price Developments ....................................................................................................... 16 3.4 Monetary Developments ................................................................................................ 19 3.4.1 Monetary Policy Stance.............................................................................................. 19 3.4.2 Monetary Aggregates ................................................................................................. 20 3.4.3 Commercial Banks’ Credits to the Economy ........................................................... 23 3.4.4 Interest Rates .............................................................................................................. 24 3.4.5 Financial Markets Developments ............................................................................. 25 3.4.6 CBL’s Foreign Exchange Auction ............................................................................ 25 3.5 External Sector Developments ...................................................................................... 26 iii | P a g e Central Bank of Liberia Annual Report 2018 3.5.1 Net Lending/Net Borrowing .................................................................................... 26 3.5.2 Current Account ......................................................................................................... 26 3.5.3 Capital Account .......................................................................................................... 33 3.5.4 Financial Accounts ..................................................................................................... 33 3.5.5 Personal Remittances ................................................................................................. 34 3.5.6 International Reserves ............................................................................................... 34 3.6 Exchange Rate Developments ...................................................................................... 35 Chapter 4: Developments in the Financial Sector .................................................................... 38 4.1 Overview ......................................................................................................................... 38 4.2 The Bank and Non-Bank Financial Institutions ......................................................... 39 4.2.1 Balance Sheet of the Banking Sector ........................................................................ 40 4.2.2 Financial Soundness Indicators ................................................................................ 44 4.2.3 Developments in the Insurance Sector ..................................................................... 45 4.3 (a) Supervisory Activities ............................................................................................... 46 4.4 Rural Community Finance Institutions ........................................................................ 48 4.5 Collateral Registry and Credit Reference System ........................................................ 48 4.6 Digital Financial Services & Consumer Protection ..................................................... 50 Consumer Protection ................................................................................................................. 52 4.7 Anti-Money Laundering / Counter Financing of Terrorism (AML/CFT) ............... 53 4.8 Microfinance Sector ....................................................................................................... 54 4.9 Outlook for the Financial Sector for 2019 ..................................................................... 55 4.10 Regulatory Activities ...................................................................................................... 55 Chapter 5: Internal Developments ............................................................................................ 57 5.1 Overview ......................................................................................................................... 57 5.2 Human Resources Management .................................................................................. 57 5.3 Management Information System & Technology ....................................................... 58 5.4 Banking Operations ....................................................................................................... 59 5.5 Payments Systems Operations ...................................................................................... 60 5.6 Financial Sector Development Programs ..................................................................... 61 5.7 Financial Market Operations ........................................................................................ 62 5.8 Research and Publications ............................................................................................ 62 5.9 CBL Accounting and Finance ....................................................................................... 63 5.9.1 Income and Expenditure ..........................................................................................