Some higher-ups in government and politically connected business people are involved in a grand syndicate that is counterfeiting the Liberian banknotes in millions for personal riches, New Democrat understands.
For years the practice has been ongoing and investigation is closing in on the identities of individuals that are part of the scheme and how banknotes’ security features were leaked to them, one source said.
Commercial banks across the country are recording counterfeit Liberian dollars mainly in the ‘100’ and ‘500’ denominations.
The Central Bank of Liberia has persistently reported that a large amount of Liberian dollar was outside the banking system.
Former Central Bank Governor Milton Weeks informed a Senate inquiry (Tuesday, May 2, 2018) in Monrovia that the CBL is unable to account for L$10.9 billion dollars that are outside the banking sector.
“We have L$ 12.7 billion in circulation since the bank printed the new banknotes. The amount in circulation constitutes both the old and the new banknotes. “L$10.9 billion are outside the banking sector,” he said.
Some stakeholders including the Speaker of the House of Representatives hold the view that counterfeiting of the Liberian banknotes may be the key driver of the escalating depreciation of the Liberian dollar against the United States dollar and the resulting inflation.
Speaker Bhofal Chambers has suggested the local currency be recalled from the market while the US dollar stands as the single currency.
The cost of withdrawing the money and the inflationary impact of printing new banknotes would make the acceptance of the Chambers’ proposal unlikely, one government economist said.
– Festus Poquie