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Dedollarization in Liberia-Lessons From Cross-Country Experience


  • Jeta Menkulasi
  • Lodewyk Erasmus
  • Jules Leichter


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.

Suggested Citation

  • Jeta Menkulasi & Lodewyk Erasmus & Jules Leichter, 2009. "Dedollarization in Liberia-Lessons From Cross-Country Experience," IMF Working Papers 09/37, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/37

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    References listed on IDEAS

    1. Arturo Galindo & Leonardo Leiderman, 2005. "Living with Dollarization and the Route to Dedollarization," Research Department Publications 4397, Inter-American Development Bank, Research Department.
    2. Eduardo Fernández-Arias, 2006. "Financial Dollarization and Dedollarization," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Spring 20), pages 37-100, January.
    3. International Monetary Fund, 2003. "Economic Policy in a Highly Dollarized Economy; The Case of Cambodia," IMF Occasional Papers 219, International Monetary Fund.
    4. Plamen Yossifov, 2003. "Selective Credit Controls And The Money Supply Process In Transitional Economies: The Case Of Bulgaria," Macroeconomics 0302006, EconWPA.
    5. Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2014. "Addicted to Dollars," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 1-50, May.
    6. Liliana B Schumacher & Jiro Honda, 2006. "Adopting Full Dollarization in Postconflict Economies; Would the Gains Compensate for the Losses in Liberia?," IMF Working Papers 06/82, International Monetary Fund.
    7. Zeljko Bogetic, 2005. "Official Dollarization: Current Experiences and Issues, Cato Journal, Vol. 20, No. 2 (Fall 2000), 179-213," International Finance 0510006, EconWPA.
    8. 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.).
    9. 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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    Cited by:

    1. Sok Heng Lay & Makoto Kakinaka & Koji Kotani, 2010. "Exchange Rate Movements in a Dollarized Economy: The Case of Cambodia," Working Papers EMS_2010_18, Research Institute, International University of Japan.
    2. repec:eco:journ1:2017-04-17 is not listed on IDEAS

    More about this item


    Cross country analysis; Dual exchange rates; Liberian dollar; Liberia; Monetary policy; Money supply; Price stabilization; dedollarization; dollarization; foreign currency; inflation; U.s. Dollar;

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