Former member of the Central Bank’s Board of Directors, Muraaj Ghaith, commented in a statement to our source on the agreement reached between the Governor of the Central Bank of Libya, Naji Issa, and his Chinese counterpart regarding the launch of direct banking transactions and linking Libyan banks to the CIPS system.
He stated that this is undoubtedly a step that serves small traders who deal with China to import their needs, as it allows them direct access to the Chinese payment system through their banks, with the possibility of settlement and processing at the same time, in addition to reducing transaction fees. Conducting transactions through official banking channels also contributes to combating and limiting transfers through the black market.
Ghaith added: However, this system has limitations, as it is restricted to transactions denominated in Chinese yuan only and requires infrastructure from participating banks. Cross-border transactions still require the use of existing financial messaging networks such as the SWIFT system. There are also risks of objections from the SWIFT system or from the United States due to abandoning dollar-based settlements in favor of the Chinese yuan.
