Liberia: CBL warns banks against liquidity risk
The Central Bank of Liberia (CBL) has expressed serious concern over commercial banks holding most of their assets in foreign accounts.The Central Bank of Liberia (CBL) has expressed serious concern over commercial banks holding most of their assets in foreign accounts.
It warned this may pose a potential risk to the system if banks fail to meet domestic liquidity needs.
The CBL, however, noted that apart from two banks, loan to deposit ratios remain below 70 per cent.
"This is evidence of the comfortable liquidity position of most of the banks to meet the liquidity needs of their customers. Regarding CBL's restriction on commercial banks' placement abroad, all of the banks are in compliance with the regulations," the CBL said in a statement seen by the Liberian Observer.
The central bank also revealed the growth in credits to various sectors of the economy during the third quarter expanded by 6.3 per cent to over L$30 billion (€261.2 million), compared with 4.1 percent during the previous quarter.
Year-on-year comparison revealed that the volume of credit grew by 30.5 per cent, mainly in the construction, transport, storage, communications and the agriculture
However, the CBL said the banking sector is challenged by weak profitability due to poor assets quality and weak credit administration.