Dedollarization in Liberia-Lessons from Cross-country Experience

Lodewyk Erasmus, Jules Leichter and Jeta Menkulasi

No 09/37, IMF Working Papers from International Monetary Fund

Abstract: Liberia's experience with a dual currency regime, with the U.S. dollar enjoying legal tender status, dates to its founding as a sovereign country in 1847. Following the end of the most recent episode of civil war in late-2003, the new government has expressed interest in strengthening the role of the Liberian dollar. Liberia, however, is heavily dollarized, with the U.S. dollar estimated to account for about 90 percent of money supply. Cross-country experience suggests that dollarization does not preclude monetary policy from achieving its primary objective of price stability, and that successful and lasting dedollarization may be difficult to achieve.

Keywords: Dollarization; Liberia; Dual exchange rates; U.S. dollar; Liberian dollar; Money supply; Monetary policy; Price stabilization; Cross country analysis (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: 2009-03-11
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