Press Release No. 07/22

Press Release No. 07/22

The Executive Board of the International Monetary Fund (IMF) met today to discuss Liberia's progress under the February-September 2006 Staff Monitored Program (SMP)¹. The Board was also informed of Liberia's new SMP for the period through end 2007.

Following the Board meeting, John Lipsky, First Deputy Managing Director, made the following statement:

"The Executive Board of the IMF was informed today of progress in implementing policies under the February-September 2006 staff monitored program (SMP) and the understandings that were reached with the authorities on a new program for 2007. Liberia's performance in implementing macroeconomic policies and economic reforms under the SMP has been satisfactory. The achievements under the SMP have supported a recovery in real GDP growth, fostered price and exchange rate stability, and brought about a significant improvement in public financial management and in the financial position of the Central Bank of Liberia (CBL).

"The government has demonstrated strong ownership of the ambitious and comprehensive new program to end-2007. The program aims to further improve economic governance, public financial management-including tax and customs administration-and the health of the banking sector, and envisages vigorous implementation of the government's anticorruption and domestic debt resolution strategies. The staff has concluded that the policies under the 2007 program meet the standard of an upper credit tranche Fund arrangement, apart from program financing assurances.

"Liberia's external debt is unsustainable, and it is urgent to make progress in moving Liberia onto the path toward debt relief. This underscores the importance of mobilizing the necessary financing for arrears clearance and debt relief for Liberia.

"It is important that the IMF be in a position to assist Liberia to normalize its relations with the international community as soon as possible, and Fund management looks forward to indications that the membership will demonstrate its full support in reaching agreement on an appropriate financing package."

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¹ A staff monitored program (SMP) is an informal agreement between national authorities and Fund staff to monitor the implementation of the authorities' economic program.