Liberia remains a fragile, post-conflict country with weak capacity and limited physical and human capital accumulation. External assistance to Liberia is winding down from its peak in 2016. To address pressing needs, the government launched its Pro-Poor Agenda for Prosperity and Development (PAPD), focusing on physical and human capital accumulation. Policy uncertainty and slippages, however, imposed a significant toll on the economy over the past two years. Particularly, higher fiscal deficits and accommodative monetary policy have led to rapid depreciation of the Liberia dollar and increased inflation, eroding the purchasing power of the poor.
This paper discusses Liberia’s Second Review Under the Extended Credit Facility (ECF) Arrangement and Request for Waiver of Nonobservance of Performance Criteria and Modification of a Performance Criterion. Program performance has weakened relative to the previous review, as well as the former ECF-supported arrangement. Three out of six performance criteria and two out of four indicative targets were missed. The IMF staff supports the completion of the second review of the ECF arrangement and the authorities’ request for waivers of performance criteria and modification of the domestic financing performance criterion.
In April 2011, Executive Directors held a preliminary discussion on the use of the profits of SDR 6.85 billion from the Fund’s limited gold sale. They noted their expectation that at least SDR 4.4 billion of the profits would be placed in an endowment within the Investment Account, and affirmed their support for the 2009 financing package for low-income countries (LICs), including the distribution to the Fund’s membership of up to SDR 0.7 billion from the profits linked to gold sales, with the expectation that most members will return equivalent funds to the Poverty Reduction and Growth Trust (PRGT). There was a wide range of views among Directors on the three main options presented for the windfall of SDR 1.75 billion, but no consensus favoring a single option. The main options presented included use of resources linked to the windfall to boost the capacity of the PRGT, counting the windfall towards precautionary balances, or investing the windfall profits as part of the Investment Account’s endowment. Many Directors indicated that they could support a combination of two or more of the main options.
This book includes 21 case studies of technical assistance provided by the IMF's former Monetary and Financial Systems Department during 2003-06. These studies cover issues related to monetary policy and operations, financial markets, payment systems, and financial regulation and supervision, with an emphasis on both the substance of the issues and the modalities of technical support. The book illustrates that the formulation of sound monetary and financial policies needs to be complemented by proper and efficient implementation. It shows how weaknesses in institutional capacity can hinder policy implementation and how these weakenesses can be overcome to achieve a desirable level of monetary and financial stability. In addition to traditional elements of the official financial infrastructure, such as the capacity to conduct monetary and foreign exchange operations or effectively supervise banks and other financial institutions, the book also presents information on recent developments in governance arrangements.
This Selected Issues and Statistical Appendix paper examines recent economic developments and medium-term outlook for Liberia. This paper focuses on economic developments during 2003 and 2004 and the medium-term challenges of reconstruction. The paper explores the pros and cons of adopting full (de jure) dollarization in Liberia. It reviews the theoretical arguments for and against adopting dollarization and the associated empirical evidence. The choices of monetary and exchange rate regimes made by other post-conflict countries are presented. The paper also assesses whether Liberia, in its current post-conflict situation, could benefit from dollarization.