A source at the Central Bank of Libya exclusively revealed to Sada Economic that the bank continues its efforts to support the value of the Libyan dinar.
The source added that all possibilities are on the table, including a further reduction in the foreign exchange tax or its complete elimination by the end of the year.
The oil-focused website Oil Price reported on Saturday that Libya, the largest oil producer in North Africa, is once again making headlines, particularly in light of the ongoing struggles within the OPEC market.
According to the report, while Europeans view Libya as a potential energy source for their industries amid the European oil crisis, Libya continues to produce significantly less than its historical levels. Steps are being taken to increase production substantially in the coming years. Meanwhile, Moscow is crafting a new major strategy, not only strengthening ties with Haftar but also potentially jeopardizing Europe’s energy supplies.
Oil Price highlighted that some experts believe the current discussions between Russia and Haftar have a single primary goal: “subjugating Europe” and enabling Russia to assert control over the future of oil and gas in North Africa. Recent weeks have seen the closure of the Sharara oil field, which has a capacity of 300,000 barrels per day, severely impacting supplies to European clients. About 80% of Sharara’s production is directed to Europe, with major operators including Norway’s Equinor, Austria’s OMV, France’s TotalEnergies, and Spain’s Repsol.
The site noted that Moscow views the potential conflict between Libyan National Army-backed forces and European oil and gas operators as an opportunity to serve Russian interests. Companies like Gazprom or a newly merged Russian entity combining Gazprom Neft and Lukoil could step in. While this might seem far-fetched to Western partners, the power dynamics on the ground in Eastern Libya favor Moscow.
If Russia succeeds, it will not only weaponize Libya’s energy resources but also gain access to the country’s precious minerals and those in Sub-Saharan Africa. Libya has shown increased interest in joining the BRICS group, presenting an economic and political alternative to Western alliances. Libyan officials confirmed this interest during the Russia-Africa Partnership Forum held on November 9–10 in Sochi, Russia, though no formal invitation has yet been extended.
The report further revealed that in the past month, the investigative platform Ikhad reported an increase in Russia’s military presence in Libya. Since March, Russian forces have established multiple air bridges to Brak al-Shati airbase and increased activities at four other strategic military bases: Jufra, Gardabiya, Tobruk Port, and others. This indicates Moscow’s determination to use Libya’s oil and gas regions in the east as a gateway to Africa.
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Legal advisor Hisham Al-Harati stated exclusively to Sada Economic Newspaper: “The methodology adopted in drafting the decision to reduce the fee imposed on the exchange rate clearly indicates that the dinar’s value will remain stable at this level, likely at least until mid-next year.”
He added, “The decision uses wording that circumvents judicial rulings on the matter and presents it as an independent new decision unrelated to previous ones. Additionally, the change in the fee value is contingent on the Central Bank’s ability to meet its obligations, which requires sufficient time to achieve the necessary balance for the adjustment.”
The French intelligence website Africa Intelligence reported on Thursday that the legal dispute with the Russian company Litasco is ongoing.
The website confirmed that the National Oil Corporation (NOC) owes approximately $42 million to the fuel trader Litasco, which is currently pursuing legal action in the United Kingdom.
At the same time, Libya’s Financial Regulatory Authority has referred the case to the Public Prosecutor, according to the report.
Libyan businessman Husni Bey stated in an exclusive comment to our source:
“The Central Bank of Libya undoubtedly has the capacity to defend the dinar at any rate it deems appropriate. The bank possesses gold and currency reserves exceeding $90 billion (with gold reserves over $10 billion and dollar reserves amounting to $80 billion). These high reserve levels allow the Central Bank to safely reduce the dollar exchange rate to below 5.000 LYD, thereby strengthening the purchasing power of the Libyan dinar.”
He added: “Let us conduct a simple simulation. It can be said that the official and parallel exchange rates could drop by 250 dirhams for every 5% reduction in the fee. The Central Bank can defend the dinar at around 5.000 LYD/USD, even if this requires using up to $5 billion in reserves annually, with an oil price of $75 per barrel for several years.”
From the consumer’s perspective, Bey explained, a reduction in the exchange rate positively impacts prices and services in the medium and long term. Such a reduction could pressure the prices of durable and consumable goods to decline over time. However, in the short term (3 to 6 months), it may cause some disruptions.
In the short term, Bey highlighted that exchange rate reductions could create distortions in the overall economy, leading to losses for many service providers and suppliers. This may also reduce supply, causing an imbalance between supply and demand, which could temporarily drive prices up instead of down due to traders’ reluctance to lower prices.
However, he emphasized that prices will stabilize and decrease in the medium and long term, likely beyond seven months. Economic balance is always governed by the “supply and demand” equation—if supply decreases, prices will rise even if the exchange rate drops.
Regarding the phased reduction of the fee by 5% or its potential cancellation by the end of the year, Husni Bey noted that this creates uncertainty among traders and speculators. As a result, traders may hesitate to import, and suppliers may cease deliveries, leading to reduced availability of durable and consumable goods. This decline in supply, coupled with steady demand, could drive prices up in the short term, further fueling inflation for 3 to 6 months.
He elaborated: “The mere suggestion of reducing the fee by 5% since mid-October 2023 and talks about canceling it entirely by 15% at the end of December 2023 alarm suppliers, discouraging them from taking risks. This is expected to shrink imports, with losses of around 5% by December 2024 and up to 15% in the first quarter of 2025 for those importing now at a fee-inclusive rate of 15%.”
In conclusion, he stated: “Reducing the exchange rate or the fee remains positive in the medium and long term (beyond seven months), even if it has negative effects in the short term, up to six months. The success or failure of monetary policies ultimately depends on fiscal policies and government spending. The government must avoid ‘expanding public spending,’ ‘financing budgets through deficits,’ and should adhere to the Central Bank’s monetary policies to defend the exchange rate determined by its board of directors.”
He concluded by saying: “My personal opinion is that the ideal rate the Central Bank can defend without depleting reserves is 6.000 LYD/USD. If public revenue is supported through reserves, the Central Bank could defend a rate below 5.000 LYD/USD, provided oil production exceeds 1.3 million barrels per day, gas production surpasses 1.4 billion cubic feet per day, and oil prices remain above $75 per barrel.”
Our source has exclusively obtained a circular from the Central Bank of Libya regarding the Parliament’s decision to reduce the tax by 5%, bringing it down to 15%.
The Central Bank also emphasized the need to streamline procedures for opening letters of credit for all purposes, goods, and services.
Our source has exclusively obtained the decision by the Speaker of the House of Representatives to impose a 15% fee on the official foreign exchange rate for all purposes. The exchange rate will include this fee, considering exemptions granted by the Speaker’s decisions, with the possibility of reduction based on Libya’s revenue conditions upon the recommendation of the Governor of the Central Bank of Libya and his deputy.
Additionally, revenue from this tax will be allocated to cover public project expenses, as outlined in the development resources managed by the Central Bank of Libya, in accordance with the House of Representatives Law No. 30 of 2023, for repaying public debt when necessary.
Banking expert Misbah Al-Akari wrote an article discussing the positive figures released today by the Central Bank, highlighting key payment trends over the past 10 months:
The article emphasizes the positive trend of electronic payments, which constitute the highest share. The total number of POS terminals has reached 70,000, with 4.7 million activated cards, and 110 million transactions carried out worth a total of 18.2 billion dinars. Additionally, the number of banking app users has risen to 2.9 million, with transaction values reaching 74.8 billion dinars.
These statistics highlight significant progress in digital transactions in Libya, particularly after the transition of the National Distributor from a transaction company to the Central Bank. The year 2025 is expected to be pivotal for the country’s digital transformation. The article also calls for increased participation from the Libyan community, including individuals, traders, and artisans, in this national strategic project.
Al-Akari also recommends that the Ministry of Economy require businesses to accept electronic payment tools when applying for trade licenses and urges municipal inspection authorities to penalize shops lacking such tools.
He concludes by expressing appreciation for those contributing to Libya’s shift from cash reliance to the benefits of electronic payments.
A source at the Central Bank of Libya exclusively revealed to our source that the process of connecting the Trading Network with the Transactions Network has been successfully completed.
As a result, all cards in Libya will now work on all POS terminals.
In the presence of the institution’s partners, several consultants, and ambassadors from the member states of the sanctions committee, the Libyan Investment Authority held its second annual forum for 2024 on Thursday morning in the Libyan capital, Tripoli, under the title (Second Annual Forum for Reviewing Strategic Initiatives).
In a statement to our source, the Advisor to the Libyan Investment Authority, Louay Al-Griw, said that the forum discussed the strategic direction and financial performance of the authority and its group. The forum aimed to maximize the value of Libya’s sovereign wealth and contribute to the development of the national economy, while strengthening cooperation between the relevant parties and stakeholders.
Al-Griw further stated that this achievement was recorded during the forum when the authority received the financial statements for its group for 2020 from Deloitte, a global leader in auditing and accounting. This strategic step reflects the authority’s commitment to transparency and enhances its position in the sovereign investment sector.
He added that this step received praise from the Chairman and CEO of the institution, Dr. Ali Mahmoud, who appreciated the efforts of the steering committee of the institution’s group, its partners, and those who worked on completing the project according to international standards (IFRS).
Al-Griw concluded his statement by mentioning that the forum also included a presentation by PricewaterhouseCoopers on its plan to prepare the financial statements for the institution for the years (2021, 2022, 2023), adhering to best practices and international standards. Additionally, Ernst & Young presented a detailed report on their executive stance regarding the review of the financial statements for 2020, aiming to enhance the regular financial data, which will strengthen the principles of financial disclosure.
The German site Reliefweb reported today, Sunday, that Libya has experienced widespread conflict, civil unrest, and economic and political instability since 2011. While the humanitarian situation in the country has improved since the ceasefire agreement in October 2020, Libyans continue to suffer from the impacts of economic instability.
According to the United Nations High Commissioner for Refugees (UNHCR), migrant groups, including asylum seekers, refugees, other non-Libyan residents in or transiting through Libya, and internally displaced persons, remain among the most vulnerable populations.
The site highlighted that the influx of migrants has placed additional strain on the already limited local infrastructure and resources, leading to shortages of food, water, and medical services. This has exacerbated humanitarian needs for both migrants and members of the Libyan community.
The report continued by noting that migrant children, especially Sudanese children, lack access to adequate nutrition, healthcare, and proper sanitation, increasing their risk of disease and malnutrition.
Economic expert Mohammed Abu Snina wrote an article in which he stated:
“Some pages on social media have circulated the information regarding the increase in the profits of commercial banks combined, during the current year until the end of the third quarter of the 2024 fiscal year. These profits reached 1.639 billion dinars, compared to 668.0 million dinars at the end of the third quarter of 2023, marking an increase of 145.4%.
The financial and objective assessment of this indicator, in order to judge the soundness of the banks’ performance, requires consideration of other related indicators. The most important of these indicators is the extent to which commercial banks have maintained sufficient provisions to cover doubtful debts, and the adequacy of these provisions. In other words, the size of the provisions gap as shown in the consolidated financial position of the commercial banks.”
The report indicates that the coverage ratio of provisions for doubtful debts to total non-performing loans stood at 58.6% at the end of the third quarter of 2024. This means that the provisions gap amounts to 41.4%. It would have been better if the banks had allocated a larger portion of their income to form more provisions to strengthen their financial position and reduce the gap. However, the banks preferred to announce large profits at the expense of forming adequate provisions to cover their non-performing debts, despite the fact that non-performing loans still exceed 20% of the total credit portfolio.
Another important indicator when evaluating the profits achieved by the banks is the source of income that led to these profits. Banks generally focus on increasing income derived from their core business, which mainly consists of the loans and facilities they provide within their primary role of financial intermediation—using deposits for financing and creating credit. In this regard, the report indicates that income-generating assets are low, accounting for less than 20% of total assets, which reflects the weakness or low utilization of funds by commercial banks.
Another notable observation is the increase in the balance of overdraft accounts with correspondent banks (abroad), which are accounts denominated in foreign currency. The report shows that the overdraft balance increased from the equivalent of 181.2 million dinars at the end of the third quarter of 2023 to the equivalent of 763.5 million dinars, an increase of 421.4% by the end of the third quarter of 2024. The report attributes this relatively large overdraft balance to the delay in settling accounts with correspondent banks, exposing them to interest payments that will reduce their expected profits by the end of the fiscal year, in addition to the risks associated with the rising exchange rate of the US dollar.
In conclusion, the profits announced at the end of the third quarter of 2024 should be viewed with caution, as they came at the expense of obligations that banks should not have ignored. Furthermore, most of these profits are a result of fees and commissions imposed by banks on their customers, rather than from financing activities related to their core operations.
The Italian website timesaerospaceo reported on Thursday that the Italian airline ITA Airways has launched a new direct flight route between Rome Fiumicino Airport and Mitiga Airport.
The website stated that the flights are scheduled to start on January 12, 2025.
The resumption of direct flights between Rome Fiumicino and Mitiga Airport was made possible through significant support from the Italian Prime Minister’s office, in cooperation with the Ministry of Foreign Affairs and International Cooperation, the Ministry of Transport, as well as civil aviation authorities from both Italy and Libya.
Andrea Benassi, the CEO of ITA Airways, mentioned: “ITA Airways worked closely with the Prime Minister’s office, the government, and the airline’s foundation to establish regular connections between the two countries.”
He continued, saying that Libya is a highly important market, and this route will strengthen trade between Libya and Italy while supporting many Italian companies operating in Libya, according to the website.
Our source has exclusively obtained correspondence from the Deputy of the Libyan Audit Bureau, Atiyat-Allah Hussein Abdelkarim, expressing reservations regarding the National Authority for Corneal Transplantation’s contract with Al-Ayham Medical Services Company. The contract, valued at a total of 17.9 million Libyan dinars, is for the procurement of corneas and visiting doctors.
The concerns are based on the lack of submission of the minimum required documents, in addition to issues with certain procedures, such as the failure to provide preliminary insurance from companies bidding for the tender and the absence of a prepared estimated value for the contract.
Hisham Al-Siddai, the legal advisor for the steering committee of the Islamic Call Society, stated to Al-Sada Economic News: “The Tripoli Court of Appeal’s ruling is binding on all entities within the host country and abroad. It is crucial for this ruling to be implemented without obstruction from any party, out of respect for independent judicial decisions and to ensure overdue employee salaries are paid as quickly as possible, allowing the Society to resume its outreach activities.”
He further stated: “The ruling from the Tripoli Court of Appeal is mandatory to prevent tampering with the Islamic Call Society’s funds and assets and to protect its reputation.”
He added, “Law enforcement agencies in the country must enforce court rulings to prevent the country from descending into chaos due to lack of respect for the judiciary. The issuance of this ruling has established the truth.”
He continued, “We hope that regulatory authorities in Libya will support the steering committee in enforcing the existing legislation and implementing the relevant rulings.”
