In 1974, the government established the National Bank of Liberia. It became the exclusive banker and fiscal agent of the government, introduced reserve requirements for commercial banks, and undertook their supervision. Liberia's commercial banks had their main offices in Monrovia. The Liberian Bank for Development and Investment was established in November 1965 to provide additional medium-and long-term financial aid to worthwhile industrial projects. A National Housing and Savings Bank was established in 1972, with priority given to low-cost public housing. An Agricultural and Cooperative Development Bank provided credit to facilitate capital investment in agriculture.
In the 1980s, Liberia was plagued by the outflow and hoarding of US dollars, the only legal notes. The government minted a L $5 coin to restore liquidity, but this action only led to more hoarding of US bills, which traded informally at a premium compared to similarly denominated Liberian coins.
In November 1996, the chairwoman of the ruling Council of State, Ruth Perry, imposed a freeze on all government spending. She said the step was necessary to stabilize state finances and provide for civil service salaries, many of which had not been paid for months. The only bill in circulation in 1999 was the L $5 piece. Banks were only available as a repository for funds, and did not pay interest or make loans. Banks operating in 1999 included the International Trust Company of Liberia, the Liberia Bank for Development and Investment (LBDI), the National Bank of Liberia, the National House and Savings Bank (NHSB), and the Tradevco Bank.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $35.1 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $58.5 million.