Liberia`s finance minister urges calm over currency crisis

Monrovia: Liberia`s finance minister warned against panic today after being summoned to parliament to explain a crash in the value of Liberia`s currency against the US dollar. "Let`s be careful about what we say about the economy. Inflation, ladies and gentlemen, is not out of control," Amara Konneh told lawmakers, while adding that the government was "concerned" about the trend.

The exchange rate has increased from 60 Liberian dollars (LRD) for a US dollar to 87 in less than a year, causing alarm over spiralling living costs. Liberians can use their own currency and US dollars to buy goods and services, and civil service salaries are paid in US dollars. But ordinary Liberians who earn local currency are expected to pay their taxes in US dollars. Konneh put the LRD`s sliding value down to the relatively abundant supply of the local currency compared with US dollars and said he was doing all he could to remedy the situation, without elaborating. "When you have eight billion LRD circulating in the economy and you don`t have the corresponding US dollars circulating to reach an equilibrium, you will have this situation," he said. The price in Liberian dollars of many commodities has more doubled since a year ago as a result of the crisis. "We need to buy US dollars before going to purchase goods out of the country. When the goods are here we have to pay our taxes in US dollars. If we don`t increase the price, we will lose," an Indian businessman in Monrovia told AFP. Patricia Sneh, a 45-year-old shopper in a Monrovia market, told a news agency the groceries she had bought for 300 LRD just 24 hours earlier were now priced at 400 LRD. "This is very worrisome," she said.