The Central Bank of Liberia’s Monetary Policy Committee maintained the Monetary Policy Rate at 16 percent but tightened requirements for USD deposits and adjusted its interest rate corridor. The reserve requirement on USD deposits increased by 2 percentage points to 12 percent, while the requirement on Liberian dollar deposits remained at 25 percent. The changes are intended to improve monetary policy transmission and liquidity management while addressing vulnerabilities associated with high financial dollarization. The Standing Deposit Facility spread was adjusted from 5.5 percentage points below the policy rate to 6 percentage points below it, while the Standing Credit Facility spread narrowed from 1 percentage point above the rate to 0.5 percentage points. The committee cited moderating inflation, improved foreign exchange conditions and adequate reserves in retaining its restrictive stance. Headline inflation declined to an estimated 4.5 percent from 5.4 percent in the previous quarter and is projected at about 4.6 percent in the fourth quarter, while real gross domestic product growth is forecast at 5.5 percent for 2026. Risks remain tilted toward higher inflation, and nonperforming loans of 13.38 percent remain above the prudential benchmark.
Central Bank of Liberia holds policy rate at 16 percent, raises USD deposit reserve requirement to 12 percent
The Central Bank of Liberia held its policy rate at 16 percent but raised the reserve requirement on USD deposits from 10 percent to 12 percent and adjusted its interest rate corridor. Inflation moderated to an estimated 4.5 percent, although high financial dollarization and nonperforming loans remain key risks.