Liberia drawing down reserves amid health crisis, cenbank deputy says - CNBC Africa

Liberia drawing down reserves amid health crisis, cenbank deputy says

Western Africa

by Reuters 0

More than half of the 4,033 people who have died from the Ebola outbreak were in Liberia. PHOTO: Tourist Destinations

This is according to the country’s deputy central bank governor Boima Kamara.

“Just from June to September this year, we have spent between 40 million dollars to 50 million dollars to intervene in the economy. That level of intervention has to be done to avoid a liquidity crisis,” Kamara said in an interview on the sidelines of the fall meetings of the International Monetary Fund and World Bank in Washington.

The drawdown in reserves has been necessary to stabilise the exchange rate and avoid a potential inflation situation, he said.

(READ MORE: Liberia fights Ebola in capital, W.Africa toll tops 1,200)

Liberia has been hit hard by the Ebola outbreak, the worst on record. More than half of the 4,033 people who have died from the disease were in Liberia, where the healthcare system is still reeling from a devastating 1989-2003 civil war.

Because of the strains on its reserves, Liberia was seeking ways to partner with some international institutions, like the World Bank, Kamara said.

So far, there were positive signs.

“We anticipate some level of interventions from the World Bank,” he said.

Donors have promised hundreds of millions of dollars in aid amid fears of a global pandemic, but many in Liberia – including President Ellen Johnson Sirleaf – say that help has been too slow in coming to a nation of four million people.

(READ MORE: Kenya Airways to suspend flights to Liberia)

“We are looking for liquidity support to the banks, we are looking for support for businesses, in terms of having access to finance, the likelihood of refinancing arrangements,” Kamara said.

Earlier this week, Finance Minister Amara Konneh said government revenues had dropped 20 per cent, while Liberia has had to ramp up spending by some 35 per cent, leaving a budget gap of around 106 million dollars.

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