Liberia will continue to maintain an exchange-rate system that is free of restrictions on payments for current and capital transfers. However, although the official currency is the Liberian dollar, the US dollar will also continue to be legal tender. The IMF classes the L$:US$ exchange rate as "other managed", meaning that the authorities intervene to influence the direction of the exchange rate. However, it is not really used as a policy tool to improve competitiveness because of the high dollarisation of the economy. High levels of import demand against low export earnings and limited foreign-exchange reserves will maintain downward pressure on the currency. We therefore forecast that the Liberian dollar will average L$74.2:US$1 in 2011, slipping to L$77:US$1 in 2012.