Banking expert Naaman Al-Bouri spoke exclusively to our source regarding the Central Bank’s latest statement, saying:
“The statement issued today by the Central Bank of Libya shows that the bank is facing a difficult and complex situation.”
He added:
“Excessive public spending by two governments, along with resorting to deficit financing during Q4 of 2024 and Q1 of 2025, coinciding with the decline in oil and sovereign revenues, all pushed the Central Bank to make the decision to devalue the exchange rate.”
He continued:
“The key question now is: Can the Central Bank refuse to continue financing the deficit until a unified budget and austerity-based fiscal policies are implemented?”
He further stated:
“Unfortunately, the absence of the interest rate—as one of the most important monetary policy tools—has forced the Central Bank to use the exchange rate as its only tool, which poses serious economic risks.”
Al-Bouri stressed:
“The Central Bank must insist on its commitment not to finance any government through deficit spending. Government funding must be directly tied to state income from oil and other sources. Chapter II of the budget must be strictly linked to actual state revenues.”
He emphasized:
“If the Central Bank cannot stop deficit financing, then today’s decision to devalue the dinar will not be the last one this year.”
He concluded:
“Deficit financing means creating a new money supply, and every new dinar created will seek to convert into dollars, further exacerbating the exchange rate crisis. Therefore, all off-budget government financing must immediately stop. The legislative authorities must take historic responsibility to unify the government and adopt a single budget that does not exceed state revenues. The current situation requires a collective effort from all sides.”
