PHOTO: CBL Executive Governor Saamoi: The MPC observed strong domestic performance in Q4 2025, with real GDP growth of 5.1%, exceeding earlier projections
SOURCE: Daily Observer newspaper
By David A. Yates
- The Central Bank of Liberia (CBL) on Monday read its first Monetary Policy Committee (MPC) Communiqué for 2026, maintaining the monetary policy rate at 16.25%, citing sustained moderation of inflation, improved fiscal discipline, and strengthened macroeconomic stability.
The reading, held at the CBL Ballroom on Ashmun Street, brought together government officials, financial sector leaders, business representatives, academics, and students from Liberia’s major universities.
Deputy Governor for Economic Policy, Dr. Musa Dukuly, welcomed attendees, highlighting the Bank’s commitment to transparency, accountability, and data-driven policymaking.
“It is my honor to welcome you to this first reading of the Monetary Policy Committee Communiqué, following the conclusion of its first quarterly meeting for 2026. This important occasion underscores the CBL’s firm commitment to transparency, accountability, and discipline in data-driven policymaking in pursuit of macroeconomic stability and sustainable economic growth,” Dr. Dukuly said.
He praised the leadership of MPC Chairman and Executive Governor of the CBL, Henry F. Saamoi, noting the Bank’s achievements under his stewardship.
“Under the leadership of Your Honorable Henry F. Saamoi, the Central Bank attained the lowest-ever inflation in 20 years of 4%, and in addition, the Bank managed to attain performance benchmarks under the IMF. True leadership is not measured by authority, but by the confidence and stability it delivers,” Dr. Dukuly emphasized.
In his reading of the Communiqué, Governor Saamoi underscored that the MPC’s decisions were informed by rigorous assessments of global and domestic economic conditions, including growth, inflation, exchange rates, fiscal operations, monetary aggregates, and financial sector stability.
On the global front, the committee noted that the economy showed resilience in the fourth quarter of 2025, with global growth estimated at 3.3%, and similar projections for 2026.
However, the MPC highlighted persistent downside risks, including geopolitical uncertainties, rising protectionism, fiscal vulnerabilities, tighter immigration policies, and potential financial market adjustments.
“Despite ongoing efforts in sub-Saharan Africa to manage debt, vulnerabilities remain elevated. Sustained fiscal consolidation, enhanced domestic revenue mobilization, improved public investment efficiency, and deepening financial inclusion are critical for sustaining stability and growth,” Governor Saamoi said.
Global inflation showed a gradual moderation, with headline inflation falling to 4.1% in 2025. The MPC projected a decline to 3.8% in 2026, while noting upside risks from trade policy uncertainties and divergent inflation dynamics across major economies.
Regionally, sub-Saharan Africa recorded 13.3% inflation in 2025, projected to decline to 10.9% in 2026. These developments are expected to ease domestic price pressures, alongside declining food and fuel costs.
The MPC observed strong domestic performance in Q4 2025, with real GDP growth of 5.1%, exceeding earlier projections.
The growth was supported by stable macroeconomic conditions, robust private sector output—particularly in mining—and resilient consumption demand.
Inflation averaged 4.4% in the fourth quarter, declining from 5.9% in the previous quarter, with end-period inflation at 4%.
Governor Saamoi noted that “the stability of the Liberian dollar, lower domestic food and fuel prices, and subdued non-food inflation supported by improved supply conditions and lower import costs contributed to this outcome.”
Looking ahead, inflation is projected to edge slightly upward in early 2026 due to post-festive spending and increased foreign exchange demand but is expected to remain within the single-digit target band, averaging 4.8%, supported by exchange rate stability, higher remittance inflows, and favorable terms of trade.
Growth momentum is expected to continue in early 2026, driven by mining expansion, ongoing public investment, and resilient domestic demand.
Overall, the MPC described the domestic macroeconomic environment as resilient and broadly sustainable.
The MPC highlighted that the banking sector remains well-capitalized and liquid, with total capital increasing by 3.9% and a capital adequacy ratio of 37.9%, well above the regulatory minimum of 10%.
Liquidity ratios stood at 50.1%, exceeding the minimum requirement of 15%.
Non-performing loans declined from 19.7% to 12.58%, reflecting ongoing balance sheet repairs and cautious lending practices.
Private sector credit grew by 3.8%, while total deposits and assets increased by 3.9% and 5.4%, respectively.
“The full implementation of the NPR Resolution Framework will strengthen asset quality and support credit growth,” the MPC noted, emphasizing readiness to deploy macroprudential measures to safeguard financial stability.
Broad money supply rose 17% to L$289.2 billion, driven by growth in net foreign and domestic assets. Interbank rates aligned closely with the standing deposit facility rate, signaling stronger market responsiveness.
Fiscal operations in Q4 2025 resulted in net liquidity injections, particularly in US dollars, supporting relative stability of the Liberian dollar.
The fiscal stance remained expansionary, with a positive fiscal impulse of 3% of GDP, up from 2.3% in the previous quarter. The external sector recorded a merchandise trade surplus of 0.2% of GDP.
Gross international reserves increased by 3.8% to US$575.5 million, exceeding IMF targets. Net personal remittances rose by 1.7% to 4.1% of GDP, further strengthening exchange rate stability.
After deliberations, the MPC resolved to maintain the monetary policy rate at 16.25% until the next assessment, maintain the interest rate corridor at plus 2.5% and minus 7.5% around the NPR for the standing credit and standing deposit facilities, and maintain reserve requirement ratios at 25% for Liberian dollars and 10% for US dollars.
Governor Saamoi emphasized that with inflation declining faster than anticipated and growth strengthening, the focus of monetary policy will shift towards consolidating gains and supporting real-sector recovery for inclusive growth. The next MPC meeting is scheduled for Monday, April 27, 2026.
Minister of Commerce and Industry, Madam Mardalene Dagoseh, lauded the CBL for its stewardship and highlighted the Ministry’s commitment to translating monetary policy into tangible economic benefits.
“The Ministry of Commerce and Industry fully recognizes that macroeconomic stability, effective market regulation, and price stability are mutually reinforcing pillars for sustainable national growth,” Minister Dagoseh said.
She emphasized that SMEs, the backbone of Liberia’s economy, benefit from stable pricing and policy-enhanced markets. “When SMEs operate in an environment characterized by price stability and effective regulations, they are better positioned to grow, create jobs, and contribute meaningfully to national development,” she added.
The Minister further called for continued collaboration with the Central Bank, particularly in addressing price stability and supply chain challenges, to ensure macroeconomic stability translates into measurable benefits for Liberian households and businesses.
The 2026 Monetary Policy Communiqué underscores Liberia’s progress towards macroeconomic stability, continued financial sector resilience, and sustained growth, signaling cautious optimism for the first quarter of the year.