Misbah Al-Akari: “Under These Conditions, the Liquidity Problem Will Be Fully Resolved by 2025”

Former member of the Central Bank of Libya’s Exchange Rate Committee, Misbah Al-Akari, stated: “The liquidity problem will be fully resolved by 2025 provided that all stakeholders (citizens, the private sector, and government entities) commit to using alternative payment tools, which have already become widely available and are expected to grow even further in 2025. This will be supported by additional incentives, such as significantly reducing fees and enabling citizens to use up to 60% of their salaries via these tools when due.“

Al-Akari added: “When everyone commits to adopting this modern approach to transactions, the long queues of humiliation will become a thing of the past. These tools will ensure fairness, eliminate favoritism in cash withdrawals, and curb the financing of currency speculators, which has led to a 35% discrepancy in the Libyan dinar’s exchange rate on the investment side.“

Clarifying the steps for implementing these modern tools, Al-Akari explained: “Activating the unrestricted Mudarabah (Islamic finance product) will allow commercial banks to invest their excess funds with the Central Bank, increasing their revenues and enabling them to further reduce fees for their clients. Additionally, this product will provide commercial banks the opportunity to open investment accounts and restricted Mudarabah products for their customers, creating an investment-friendly environment. Citizens and business owners will be able to utilize such products to grow their funds. These investments will have significant positive effects not only for the investors themselves but also for the Libyan economy as a whole. Moreover, these investments will help absorb a considerable portion of the money supply, the primary driver of foreign currency price increases.“

Al-Akari further noted that by 2025, after mitigating and eventually resolving the liquidity problem and expanding electronic services to reduce congestion at banks, the banks will be well-positioned to return to their fundamental role as financial intermediaries. They will then be able to offer loans and facilities for both small and large-scale projects, contributing to greater diversification of the Libyan economy through these financial tools.

The insistence of the Central Bank of Libya on the shift to electronic transactions, which is supported by all experts and specialists in this field, is due to the following reasons:

1. Electronic payment tools directly eliminate the need for paper currency except in limited contexts.
2. This transformation reduces overcrowding at banks.
3. It enables banking services to be accessed from home or the office without visiting a bank.
4. It puts an end to corruption associated with cash withdrawal operations.
5. It provides statistical data that can be used for studies relevant to the national economy.