- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 16%
The Central Bank of Liberia held its Monetary Policy Rate at 16.0%, maintaining a restrictive stance as inflation moderated, foreign exchange conditions improved and economic growth strengthened, following July’s 25-basis-point cut from 16.25%. It raised the reserve requirement on USD deposits to 12%, left the requirement on LRD deposits unchanged and adjusted its interest-rate corridor to strengthen monetary transmission and liquidity management while addressing vulnerabilities associated with high financial dollarization. Headline inflation eased to an estimated 4.5% and is expected to remain broadly stable in the fourth quarter of 2026, within the central bank’s medium-term tolerance range. Real gross domestic product growth is projected at 5.5% in 2026, supported by mining, manufacturing and services, although elevated non-performing loans continued to constrain lending to productive sectors. International reserve cover declined but remained adequate, while improved exchange-rate conditions helped contain imported inflation. Globally, geopolitical tensions, higher oil prices, renewed inflation pressures and tighter financial conditions increased risks to the outlook. The committee judged inflation risks moderately tilted to the upside and said future decisions would remain data-driven, with additional measures available if needed to safeguard price and financial stability.
Rate evolution
The Central Bank of Liberia lowered its policy rate by 125 basis points to 16.0% between October 2025 and October 2026, pausing before and after a smaller second cut. An initial 100-basis-point reduction reflected easing food and imported inflation and exchange-rate appreciation, followed by holds as inflation moderated further, although April brought a cautious tightening bias amid energy shocks and depreciation pressures. July’s 25-basis-point cut reflected contained underlying domestic inflation, improving exchange-rate conditions and stronger reserves, despite higher imported food and fuel prices. In October, the bank held at 16.0% as headline inflation fell to an estimated 4.5% and growth strengthened, while raising reserve requirements on USD deposits from 10% to 12% to strengthen liquidity management and address dollarization. The latest stance remained restrictive, supported by improved foreign-exchange conditions, adequate reserves and banking resilience, with inflation forecast at 4.6% in the fourth quarter, risks broadly balanced but moderately tilted upward for inflation, and future policy decisions data-dependent amid geopolitical, energy-price and financial-sector risks.