Our source obtains the report of the Banking and Monetary Supervision Departmen regarding the commercial banks’ use of foreign exchange

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Our source obtained a copy of the Central Bank of Libya’s report regarding the banks’ use of foreign exchange, as the total foreign exchange expenditures for all purposes during the first nine months of the current year 2022 amounted to about 17,873.0 million dollars, compared to 18,114.0 million dollars during the same period last year 2021, which represents a decrease of about 241.0 million dollars.

Within the framework of the Banking and Cash Control Department’s follow-up to the accepted purchase requests for documentary credits and remittances, submitted by commercial banks through the system for following-up requests for coverage, and foreign exchange sales for personal purposes, in accordance with the decision of the Board of Directors of the Central Bank of Libya No. 1 of 2020 regarding amending the exchange rate of the Libyan dinar and Banking and Monetary Control Department Circular No.9 of 2020, Commercial banks’ use of foreign exchange during the first nine months of the current year 2022 accounted for 66.9% of total expenses, to record about 11,957.8 million dollars, compared to 14,085.1 million dollars during the same period of the last year 2021, which represents a decrease of about 2,127.3 million dollars.

The total amounts of foreign exchange sold to commercial banks during the period from the 1st of January to 9/30/2022 through the system for following up on coverage requests, and foreign exchange sales for personal purposes at the Central Bank of Libya amounted to about 11,957.8 million dollars, compared to 14,085.1 million dollars during the same period of the last year 2021, representing a decrease of about 2,127.3 million dollars.

Aman Bank for Commerce and Investment was the most bank using foreign exchange, reaching about 16.5% during the first nine months of 2022 out of the total value of the amounts sold to banks, with a value of about 2.0 billion dollars, followed by Jumhouria Bank with about 1.6 billion dollars, then comes the National Commercial Bank, Yaqeen Bank, Nuran Bank, the Libyan Islamic Bank, Wahda Bank and The United Bank for Commerce and Investment in terms of relative importance.

The value of their foreign exchange use during the period, respectively, amounted to 1.4 billion dollars, 1.3 billion dollars, 900.0 million dollars, 878.6 million dollars, 802.0 million dollars, and 768.8 million dollars.

Geographical distribution of coverage requests:

European countries are the most regions to which commercial banks transferred foreign exchange to cover letters of credit or other remittances, as their relative importance during the period amounted to about 51.3% of the total foreign exchange requests, due to the geographical proximity, which plays a major role in increasing the volume of trade exchanges between Libya and the European countries, then the Arab countries came in relative importance with 21.4% of the total requests, while the Asian countries accounted for 18.4% of the total requests, and the countries of North, Central and South America and other European countries accounted for 7.8%. The data indicate weak trade exchanges between Libya, African countries, Australia and New Zealand.

According to the report, goods, and services of European origin and the countries of Turkey, China and Tunisia topped the list of the most important countries during the period of the 1st of January to the 30th of September 2022, as the percentage of requests from those countries amounted to about 51.8% of the total.

First: Purchase orders according to the most important ten commodities – the private sector:

Foreign exchange purchase requests by commercial banks of the private sector for various foodstuffs ranked first out of the total purchase requests during the period, accounting for 17.6% of the total foreign exchange purchase requests, while requests to cover importing the production requirements of basic commodities ranked second in terms of relative importance to constitute 14.5%, while feed cover requests, production and operation requirements, accounted for 11.9% and 11.0%, respectively.

According to the report obtained by our source, the foreign exchange purchase requests of commercial banks of the public sector for the requirements of operating the iron and steel plant ranked first out of the total purchase requests during the period, as it constituted 30.2% of the total foreign exchange purchase requests, while requests to cover requests for production requirements of basic commodities ranked second in terms of relative importance, constituting 11.2%, while requests for importing machinery and equipment constituted 10.0% of the total.