Dedollarization in Liberia-Lessons From Cross-Country Experience

Jeta Menkulasi, Lodewyk Erasmus and Jules Leichter

No 2009/037, 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: WP; currency; dollar; Liberia; market; dedollarization; U.S. dollar; transactions dollarization; unit of account; deposit dollarization ratio; dollarization effort; currency board arrangement; dollarization case; Currencies; Dollarization; Bank deposits; Financial sector; Monetary base; West Africa (search for similar items in EconPapers)
Pages: 23
Date: 2009-03-01
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Citations: View citations in EconPapers (5)

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