The Central Bank of Liberia basically said, “Don’t panic” following the seizure of L$1 million in counterfeit L$500 bank notes.
The bank notes are valued at about $6,845 U.S. at exchange rates posted at the time this article was being written. Such an event might not normally cause much concern, but Liberia is currently introducing a new family of currency.
A statement released Jan. 5 by the central bank said, “In addition to the first batch of L$4 billion of the new L$100 bank notes that is gradually being injected into the economy largely through the commercial banks, which began in December 2021, the CBL, working with international partners, is proceeding with arrangements for the delivery of the second L$4.0 billion new L$100 bank notes in January 2022 to begin the gradual replacement of mutilated bank notes, as well as concluding the procurement process for the printing and minting of the remaining new bank notes and coins.”
The statement continues, “Regarding the features on the newly printed L$100 and the existing L$500 bank notes, both the newly printed and existing bank notes have slanted lines, making the edges rough. When held up and flipped, the seal on the bank notes becomes visible inside the left white field, and the stars in the threads across the notes do move. The counterfeit bank notes do not have such features. Moreover, the paper used for the counterfeit bank notes can be easily detected from their feel and look as well.”
“While the CBL wants to reassure the public not to panic about the recent situation as the counterfeit bank notes can be easily recognized and detected, the public is urged to alert the CBL and the Ministry of Justice with any information relating to the use or introduction of any counterfeit bank notes.”
The CBL’s Technical Committee for Currency Reform has been working with the IMF experts to ensure an orderly replacement of all current coins and bank notes. This includes issuing coins rather than bank notes in denominations of L$10 and L$5. New bank notes are being released in denominations of L$20, L$50, L$100, L$500, and L$1,000. In late 2021 Liberia’s legislature gave the central bank a mandate for coins and bank notes to be produced in 2021, 2022, and in 2024.
Details of the situation involving the counterfeit L$500 notes were not immediately available. It is important since this is a high value bank note and it wasn’t made clear if the counterfeits involved the older or the new notes. The L$1,000 is a new denomination.
According to Liberian sources, the new L$100 and $L500 bank notes are printed using what was referred as “slanted lines, making the edges rough.” Each note has front to back registry of a seal. Stars in the security threads appear to move. The same source indicated “The paper used for the counterfeit bank notes can be easily detected from their feel and look as well.” The central bank has indicated the L$100 is the most commonly used bank note in circulation.
Counterfeiting has been a problem in Liberia in recent years. In a legislative discussion regarding changing the physical currency in late March 2021 Senator Milton Teahjay said, “I am in support of printing money, but we don’t want to print money thinking we are making the right decision but creating the problem. What is the plan to prevent duplication of the bank note? If these measures are assured, I will vote in favor of printing new bank notes.”
Liberia’s modern bank notes were introduced in 1989. The $L5 note is known as a JJ due to the vignette of J.J. Roberts appearing on the front. Liberty notes on which Liberia’s heraldry replaced the vignette of Roberts followed.
“Unified” notes on which former presidents appear exchangeable at a ratio of one for two for JJ notes were issued beginning in 2000. Minor changes to these notes were made three years later. The L$500 denomination was introduced in 2016 as the central bank introduced new notes with enhanced security features.
The need for higher denomination bank notes continues as Liberia wrestles with inflation. The annual inflation rate was at 23.55 percent in 2018, 26.97 percent in 2019, 16.95 in 2020, and at 5.87 in 2021.