Liberia has a shortage of cash. Within living memory people have made change by tearing a bill into pieces. When banks dispense cash, they often hand out those mutilated banknotes, which are worth ... what?
But there's more. The banks are complaining of a nonperforming loan rate of 56%, which of course means that when someone comes to get money out it puts a strain on the bank. A few years ago several banks started repaying deposits made in US dollars in a mix of US and Liberian dollars. That caused quite a stir at the hospital when payday came.
They are also complaining that:
Governor Tarlue named several reasons behind the money shortage which he said was exacerbated by COVID-19, the high demand of money during the festive seasons (July 26 and December 25), the limited ATM machines in the country (157) and the December 8 Special Senatorial Elections. Chief among them, he said, include the circulation of huge quantity of money outside of the banking sector. As of December 2020, he said L$25.3 billion was in circulation in the Liberian economy, and of that amount, the currency outside of the banking sector was L$22.5 billion, representing 89.4 percent of the money in circulation.
Except where is the money? Hiding under mattresses? You'd think that some of it would have to creep out from time to time to buy groceries and cell phone minutes and fabric and other everyday items. How actively is money really circulating in the markets? I can't find out, but reports say business is bad.
The government bought some fresh bills last year--or maybe they didn't--at any rate there weren't any fresh bills when they went looking. They want to print 27 billion new L$, but they don't have the money to do it (about $21 million).
The exchange rate isn't helping--imports cost more.
I can't speculate with any certainty, because news is unreliable at best. I doubt that foreign speculators have been buying up Liberian dollars (as one rumor has it)--I haven't thought of a way they'd make money that way. Maybe I don't have a dishonest enough mind. Probably this is an unintended consequence of something else.
Lockdowns haven't helped cash flow. FWIW, Liberia has had 84 deaths attributed to coronavirus--malaria dwarfs this by orders of magnitude.