Liberia: Money Exchangers Still Cautious Despite Exchange Rate Drop

Monrovia – Forex Bureau owner Lansana S. Townsend is not surprise that the exchange rate is declining but readily admits that it could be artificial.

“The money buyers are the ones who controls the rate, because depending on the way you sell the money that’s how you will be able to exchange it,” Says Townsend, who owns and manages the GN 4051 Forex Bureau downtown Monrovia.

Townsend explains that the declining exchange rate is somewhat artificial because of the shortage of the Liberian dollar on the market. “If for example you sell for 210, you will be able to exchange for 208 which gives you a profit of two dollars; but if it happens that the money buyers tell you that they are buying for the rate of 202, then you will have to exchange your money below the rate of 208.”

About a week now, the foreign exchange rate has been dropping sharply.

Visits to a number of Forex Exchange Bureaus Monday found many businesses trying to cope and gauge the market.

Money exchangers are exchanging money at the rate of 200-190 Liberian dollars against 1 united states dollar.

For Townsend, the central government needs to monitor the market to keep exchangers in check and is urging the Ministry of Commerce to work closely with the Central Bank to monitor the prices of goods and commodities so that it can commensurate with the exchange rate.

Says Townsend: “When it continues this way, it should not be one sided; so, this is where Commerce needs to come in to stabilize the prices because if they don’t correct this, those exchanging their money to us will feel cheated.”

Like Lansana, Princeton Dormentuo too says that he’s been affected negatively by the decline in the exchange rate because of the shortage of the Liberian dollars on the market.

“When we go to buy Liberty to those we transact with, they tell us that there is no Liberty  – and this is really affecting us – and business is also slow because of this. I am affected by this right now because I am out of Liberty,” Princeton says.

The money exchanger adds that his mobile money process has also taken a dive because he doesn’t have Liberian dollars to cash out to his customers.

Unlike his fellow money exchangers, Augustine Sumo sees the decline in the exchange rate as a good thing because his customer base increases whenever there is a decline in the rate.

“For those of us that are exchanging money, when the rate is dropping, we get more customers than the other way around,” Sumo says.

Iking Howard, owner of a pharmacy on the Old Road Market says that he sees nothing wrong with the drop in the exchange rate but hopes that the prices of goods and commodities drop as well.

“Once the rate is dropping, the prices still remain the same and people will start to complain and get into confrontation with us. So, we hope that the rate will drop so that we can drop our prices as well,” says Howard.

Although optimistic, Howard is still playing things by ear before purchasing a new consignment of medicine as he monitors the stability of the rate.

Faith Nyankun, is a used clothes dealer. She has mixed feelings about the reduction in the exchange.

“When the rate drop it will be ok but the rate can’t drop and then I go in the store to purchase things expensive-I will be losing on profits,” she said.

Faith is now skeptical about purchasing new goods or even exchanging her money because of the instability of the exchange rate.

“Am pleading with the person to make it possible that as the rate is dropping, things prices should drop as well. They really need to stress on things prices dropping because we the business people will be affected seriously,” Nyankun stressed.

Exchange rates in marketplaces are unofficial and vary from the buying and selling rate approved by the Central Bank of Liberia (CBL). According to the CBL, L$ 205.8891 should be exchanged for US$1 and L$207.2509 should be sold for US$1 united states dollar.