Economic expert Suleiman Al‑Shahoumi spoke, saying that in reality this adjustment must be based on a clear foundation and a defined benchmark—namely, the general budget of the Libyan state. He questioned on what basis the Central Bank carried out this adjustment and how it could aim to stabilize prices in the Libyan market—particularly foreign exchange rates in the parallel market—if the objective is stability. Such stability, he said, must be built on a clear foundation: a defined budget that regulates revenues before expenditures.
He added that Libya has a revenue problem, as revenues are being set aside and are not entering the Central Bank, instead being managed before reaching the Libyan state’s accounts at the Central Bank of Libya.
He further stated that there is escalating spending and a clear deficit in the ability to meet expenditures, with government spending ballooning significantly. Under these conditions, a general budget is essential to regulate these aspects so that a target rate—or a controlled rate—can be established on a sound basis. He questioned whether the Central Bank expects matters to end at this level and then leave everything else as it is; such an approach, he said, would inevitably lead to further adjustments and successive increases in inflation rates and price levels in the market. Ultimately, the simple citizen would bear the harm of these actions and measures, as the Central Bank may be focusing on its limited capacity to meet supply amid declining revenues and rising demand for foreign currency.
He went on to say that it is critically important to control the demand side and to think about how demand is managed in the Libyan economy, and what monetary, commercial, and fiscal mechanisms and programs are needed to reach a state of stability—or at least a situation that avoids such harsh behavior toward the national currency in the Libyan economy.
He continued by saying that, from another perspective, he sees Parliament using the tool of taxation—a fiscal instrument—but directing it in a specific way that appears aimed at generating revenues to support spending. Nevertheless, he stressed the need to regulate all revenues and place them within a disciplined, defined budget framework, through which the Central Bank can preserve monetary stability and manage liquidity or monetary policy in a more appropriate and prudent manner than is currently the case.
