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Dedollarization in Liberia-Lessons from Cross-country Experience

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Author Info
Lodewyk Erasmus
Jules Leichter
Jeta Menkulasi
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.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/37.

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Length: 23 pages
Date of creation: 11 Mar 2009
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Handle: RePEc:imf:imfwpa:09/37

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Related research
Keywords: Dollarization ; Liberia ; Dual exchange rates ; U.S. dollar ; Liberian dollar ; Money supply ; Monetary policy ; Price stabilization ; Cross country analysis ;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Sopanha Sa & Mario de Zamaróczy, 2003. "Economic Policy in a Highly Dollarized Economy: The Case of Cambodia," IMF Occasional Papers 219, International Monetary Fund.
  2. Carlos O. Arteta, 2003. "Are financially dollarized countries more prone to costly crises?," International Finance Discussion Papers 763, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  3. Jiro Honda & Liliana Schumacher, 2006. "Adopting Full Dollarization in Postconflict Economies: Would the Gains Compensate for the Losses in Liberia?," IMF Working Papers 06/82, International Monetary Fund. [Downloadable!]
  4. Adam Bennett & Eduardo Borensztein & Tomás J. T. Baliño, 1999. "Monetary Policy in Dollarized Economies," IMF Occasional Papers 171, International Monetary Fund.
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This page was last updated on 2009-10-21.


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