The proposed Independent Congress for Democratic Change is proffering a new argument for the United States Dollar to be used as a single currency in Liberia concomitantly with small denominations of Liberian dollars as the surest way of averting the ongoing skyrocketing exchange rate in the country.
The political institution, through the National Chairman of the party’s US branch, Mr. Elphinstone James Birch, believes a monetary policy for Liberia reverts to using the US Dollar as legal tender is the best option for economic rebound that the country is in dire need of to improve the lives of the citizenry. “This will eliminate the exchange rate process; attract immense foreign businesses and investments that chase the US currency. This indeed, will rebound our economy, create more jobs, and improve lives,” the proposed ICDC-USA Chairman added. He opined that the proposed economic monetary policy should work alongside smaller denominators of the dollars, while Liberian Government creates three major international large scale markets and exchange rate bureaus at the borders of Ivory Coast, Sierra Leone and Guinea. According to Mr. Birch, this will improve our local currency denominators' values against regional foreign currencies. “Therefore, over a 20 years monetary periodic re-evaluation timeframe of this policy, a positive trend of monetary values of our local smaller denominators or currencies should lead the Central Bank to gradually increase the circulation of our local currencies into the economy while very and carefully decreasing the flow of the US Dollar in our economy, by maintaining and appropriately enforcing new government's financial business-friendly regulations,” the proposed ICDC leader said. Also commenting on the high exchange rate, Professor Wilson Tarpeh said the situation is a direct result of what happens “when you apply symptomatic, fiscal solution to a deeply rooted, monetary policy problem.” The former Finance Minister said the recent government policy to use more Liberian dollars in the discharge of its domestic obligations will cause a huge supply of the local currency without the compensating demand. “Interestingly, the recipients of Liberian dollars cannot do very much with it in an economy where almost all goods and services are priced in USD. They cannot use it to pay bills, buy many essential commodities. Holders of the local dollars have to buy the USD at rates higher than what they received thereby imposing a tax on their spending,” Prof. Tarpeh maintained. He maintained that an initial step to resolving this matter is to also price all goods and services in Liberian dollars in order for people to be able to use the Liberian dollars as widely as possible for all obligations without first converting it. The University of Liberia Professor indicated that this extensive use of the local currency would potentially increase the demand for the local currency and perhaps allow the government to pursue appropriate macroeconomic adjustments as and when necessary, adding that there are many other parallel measures that can be unfastened to reduce the impact of this policy and lead to the pursuit of a comprehensive solution.