Dedollarization in Liberia-Lessons from Cross-country Experience

Author/Editor: Erasmus, Lodewyk ; Leichter, Jules ; Menkulasi, Jeta
Publication Date: March 01, 2009
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: 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.
Series: Working Paper No. 09/37
Subject(s): Dollarization | Liberia | Dual exchange rates | U.S. dollar | Liberian dollar | Money supply | Monetary policy | Price stabilization | Cross country analysis

Author's Keyword(s): dedollarization
Publication Date: March 01, 2009
Format: Paper
Stock No: WPIEA2009037 Pages: 23
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