Our source has obtained leaks from a meeting of the Central Bank’s Board of Directors indicating that foreign currency will be sold to exchange companies according to the funds available in their accounts, or up to 70% of the balance in the exchange company’s or exchange office’s account at the Commercial Bank.
This will be done without a specified cap on the volume of currency.
Our banking source told in an exclusive statement that the U.S. dollar is expected to fall below 8 dinars in the parallel market, as a result of anticipated measures by the Central Bank of Libya and the Ministry of Economy, along with the activation of exchange companies and their provision with foreign currency by the Central Bank.
The source said this will take place in accordance with the agreed mechanism, pending the announcement of the Central Bank’s procedures tomorrow or next Sunday, and the reopening of foreign currency platforms.
Written by legal advisor Mustafa Al-Manea: Lebanon’s new law on deposit recovery is “a complex surgery after the disease has worsened,” published on Arabi 21 link.
The financial and banking crisis that erupted in Lebanon in 2019 represents one of the deepest monetary and financial crises in the modern history of developing countries—not only in terms of the scale of losses but also in the way it was managed and the delay in acknowledging it. With the Lebanese government recently approving the draft law to address the financial gap and recover deposits, discussions have centered on the state’s role in protecting the monetary system.
The Lebanese pound has lost more than 90% of its value against the dollar since 2019. From about 1,500 Lebanese pounds per U.S. dollar, the pound rapidly collapsed to between 85,000 and 100,000 pounds per dollar.
Photo of Advisor Al-Manea from the official U.S. Federal Reserve headquarters.
First: Roots of the Crisis – When the Banking System Becomes a Tool for Financing Public Debt
The Lebanese crisis was not the result of a sudden external shock but the outcome of chronic structural imbalances, most notably:
Intertwining of Public Finance and the Banking Sector Commercial banks became the main financiers of public debt, concentrating sovereign risks within the banking system.
Unsustainable Monetary Policies The Central Bank of Lebanon relied on complex financial instruments to maintain exchange rate stability, effectively using people’s deposits to temporarily support this stability instead of directing them toward investment in production and the real economy.
Lack of Transparency and Accountability The true scale of losses was not disclosed early, and recognition of the so-called financial gap was delayed, allowing depositors’ rights to erode cumulatively. Bank assets fell from about $217 billion in 2019 to around $104 billion by 2024, while customer deposits shrank from roughly $172 billion to about $88 billion in the same period.
Second: The Deposit Recovery Law Represents a Delayed but Necessary Remedy
The draft law to address the financial gap and recover deposits attempts to provide a legal framework for what was previously managed through norms and unofficial restrictions.
Key economic features of the law include:
Official recognition of losses and determination of responsible parties (state, central bank, banks).
Relative protection for small and medium depositors by refunding deposits up to a certain limit within a set timeframe.
Conversion of part of large deposits into long-term financial instruments, effectively restructuring deposits.
Introduction of the concept of loss-sharing (Burden Sharing) instead of placing it on a single party.
According to government statements, 85% of depositors may recover their full deposits within four years under this law.
Third: Challenges and Limits of the Law
Despite its importance, the law faces several fundamental issues:
Lack of Clear Funding Sources Refunding deposits without specifying real foreign currency sources makes implementation dependent on economic growth or the sale of public assets.
Prolonging the Crisis Long-term repayment may turn immediate losses into a chronic burden, constraining investment and growth for years.
Limited Accountability Without clear accountability for banking management and monetary decision-makers, moral hazards remain, and risks to reputation and trust are expected.
Amid the ongoing crisis, indicators—though needing verification—suggest that nearly half of deposits have eroded or lost their real value since 2019 due to currency collapse and unregulated revaluation processes.
Fourth: Lessons Learned – What Should Not Be Repeated
No Monetary Stability Without Fiscal Discipline Lebanon’s experience shows that stabilizing the exchange rate or protecting the currency cannot be achieved by banks alone; it requires disciplined public finance and genuine tax reform.
Lebanon’s GDP has contracted by more than 40% since 2019, reflecting the profound impact beyond the banking sector, affecting the real economy. The issue becomes even more complex when banks are partly responsible for creating distortions and instability in public finance.
Deposit Protection is Not Just a Slogan but a System The absence of an effective deposit insurance system and weak banking governance made depositors the weakest link. A sound banking system requires:
Strict risk management rules
True separation between banks and the state
Immediate transparency in financial statements
Delaying Loss Recognition Multiplies Them The most dangerous aspect of Lebanon’s experience is not the size of losses but the postponement of acknowledging them, which enabled capital flight, deposit erosion, and collapse of trust.
Legislation Cannot Succeed Without Comprehensive Reform Deposit recovery laws cannot succeed in isolation from:
Reform of the Central Bank of Lebanon
Restructuring of banks
Stimulating the real economy (production, export, investment)
Conclusion
Lebanon’s experience should serve as an early warning for any similar practices.
The recent Lebanese law is a delayed but necessary step toward resolving the crisis. However, it reminds us that crisis management is measured not only by legal texts but by their timing, transparency, fairness, and performance indicators.
The Lebanese experience includes financial losses estimated in tens of billions of dollars and a dramatic decline in the local currency’s purchasing power, severely affecting depositors’ ability to maintain their wealth.
When banks become a tool for financing public spending and reform is replaced by postponement, depositors’ funds become the fuel of the crisis, not just its victims.
These are critical lessons for any country seeking to protect its currency, depositors, and economic stability before it’s too late. Lebanon’s new law represents a necessary and complex “surgery” after the disease has worsened.
Author: Legal Advisor Mustafa Al-Manea, a Libyan lawyer and legal-economic expert with over 24 years of experience. He has worked with investment institutions, sovereign funds, and banks worldwide, including Libya. He is an expert for international research centers, has served as an advisor to the Governor of the Central Bank of Libya, chaired several executive teams, sits on the board of the Libyan Investment Authority and the Libyan Foreign Bank, represented Libya at World Bank and IMF meetings, and leads the Prime Minister’s executive initiatives and strategic projects. He has lectured for the American Bar Association, is a certified member of the European Lawyers Association, a member of the Libyan-American Business Council, and has numerous publications and bold opinions on economic and financial transformation.
Our has obtained a copy of a decision issued by the Central Bank of Libya, in which it addressed banks as well as licensed exchange offices and companies, inviting them to a meeting next Thursday, January 1, 2026.
The meeting aims to regulate the work of licensed companies and offices so that they can perform their role in accordance with the law, in support of the national economy and with the provision of all necessary support to them.
The Trade and Development Bank exclusively revealed to Sada Economic Newspaper that it has postponed the implementation of its circular, which contradicts the instructions of the Central Bank of Libya and is attributed to the Control Department branch at the Central Bank in Benghazi.
This circular concerns requiring the deposit of the value of foreign currency card top-ups in cash instead of electronic payment, and its implementation has been deferred until the beginning of 2026.
Our source has exclusively obtained a circular issued by the Trade and Development Bank to its branches, requiring that the value of foreign currency card recharges be deposited in cash instead of using electronic payment methods.
This step runs counter to the directions of the Central Bank of Libya, which call for the adoption of electronic payment instruments. Specialists consider that this measure could contribute to widening the exchange rate gap applied by the bank.
Written by consultant Mustafa Al-Manea, Libya and the African Development Bank Strategy 2025–2028
At this stage, Libya seeks to move beyond traditional models of financing development projects and to abandon exclusive reliance on the public budget. This comes as the Government of National Unity works to restore confidence with regional and international partners, stimulate foreign capital, and leverage external financing instruments. In this context, the renewed partnership with the African Development Bank (AfDB) stands out as one of the most important practical tools to support this transformation, especially after the Bank adopted this week a Strategic Cooperation Framework with Libya for the period 2025–2028.
The Bank, which counts more than 80 African and non-African countries among its members and manages an annual financing portfolio exceeding USD 10 billion, does not limit its role to providing loans. Rather, it supports governance, institution-building, and the mobilization of financing from multiple sources. This approach is of particular importance for Libya, which today is searching for sustainable financing and development solutions.
The launch of the Bank’s 2025–2028 strategy coincides with the Government of National Unity, headed by Abdul Hamid Dbeibeh, adopting a more open approach toward economic reform, stimulating development, and building partnerships with foreign investors.
However, the structural challenge within the public spending framework remains. Salaries and subsidies consume more than 70% of the general budget, leaving only a limited margin for development and investment. This makes reliance on public resources alone insufficient to drive economic growth or create sustainable employment opportunities.
Key Pillars of the Strategy
The Bank’s strategy for Libya for 2025–2028 focuses on several key objectives, most notably:
Strengthening governance and public financial management, including support for budget reforms, improving spending efficiency, and developing transparency and accountability systems, including the digital transformation of public finance.
Rehabilitating and developing infrastructure, particularly in the electricity, water, transport, and logistics sectors, to ensure an environment attractive to private investment.
Focusing on the energy sector and energy transition, supporting the sustainability of the electricity grid, improving energy efficiency, and preparing Libya to gradually benefit from renewable energy projects.
Agriculture and food security, by modernizing agricultural value chains, developing irrigation systems, and linking local production to markets, thereby reducing dependence on imports.
Empowering the private sector and small and medium-sized enterprises, by improving access to finance, enhancing the business environment, and supporting entrepreneurship, especially among youth.
Previous Experiences of the Bank
The African Development Bank’s experience has proven successful in countries such as Morocco, Egypt, Kenya, Ethiopia, Senegal, and Rwanda, where the Bank linked financing interventions to institutional reforms. In these and other countries, the Bank financed projects with direct economic and social impact, including electricity generation, transmission, and distribution projects; highways and cross-city and cross-border logistics corridors; water and sanitation plants; integrated agricultural programs (production, storage, transport, and marketing); credit lines for local banks to support the private sector; and public-private partnership (PPP) projects. These are models that can be adapted to the Libyan context.
Financing Instruments Available from the Bank
Among the financing tools that Libya can leverage from the Bank are:
Sovereign and non-sovereign guarantees to reduce investor risk
Co-financing with international institutions and sovereign wealth funds
Financing for public-private partnerships (PPP)
Direct financing for the private sector
Intra-African trade support windows
Conclusion
The African Development Bank’s strategy for the period 2025–2028, if coupled with the continued governance and reform efforts led by the Government of National Unity, can represent an opportunity to contribute to sustainable growth whose impact is felt by citizens and from which the state benefits over the long term.
Consultant Mustafa Al-Manea is a Libyan lawyer and legal and economic expert with more than 24 years of experience. He has worked with a number of investment institutions, sovereign funds, and banks in several countries around the world, including Libya. He serves as an expert for international research centers and worked for years as an advisor to the Central Bank of Libya. He has also served as a board member of the Libyan Investment Authority and the Libyan Foreign Bank, represented Libya in meetings of the World Bank and the International Monetary Fund, and heads the executive team for the Prime Minister’s initiatives and strategic projects. He has worked as an expert and lecturer with the American Bar Association and is a member of the Libyan-American Council for Trade and Investment. He has published numerous research papers and articles in Arab, American, and European newspapers and is known for his bold views on economic and financial transformation issues.
One of the residents of the Savings and Real Estate Investment Bank building in the Meizran area toldour source: “The apartments were previously rented to private companies. After these companies left in 2011, the apartments became empty. We moved in during 2013, and some of us at the end of 2012, with ownership certificates.”
He added: “When we entered the apartments, they had no windows, no doors, no elevator, and no water. We — 28 families — fixed everything ourselves. We installed doors and windows, repaired the water networks, and legally connected electricity through official meters.”
He continued: “We contacted the Savings Bank to sign housing contracts, but they told us at that time that the bank was closed, there were no new contracts, and that they were tied to the Land Registry and could not issue contracts for us.”
He also said: “In 2014, the General Manager of the Savings Bank, Jum’a Al-Nayed, came to the building, toured the entrances, and was very impressed by the changes we made. The building used to be like a den where young people gathered; it was in terrible condition. That all changed because of our efforts. But after that visit, nothing happened and no one followed up with us.”
He went on: “When we later tried again to contact the bank to sign contracts, the bank clearly refused. The branch we belonged to didn’t even have a manager. Whenever we asked, they said: ‘There is no manager yet, no one has been appointed. Please wait.’”
He added: “Recently, we received summonses from the Central Police Station. We complied and went to the prosecution, which issued arrest warrants. We remained detained for 18 days. They kept telling us: ‘Hand over the apartments you’re in and then leave,’ meaning they extorted us by depriving us of our freedom. This is a great injustice. We are Libyan families — 28 apartments, all inhabited by widows, divorced women, and poor families who cannot afford rent. Rental prices today are beyond people’s means; those who rent can barely eat or drink. We also have children.”
He continued: “They cut off the water supply from the beginning of October until now. People in the building have no water. Women over 60 years old climb high floors — the 5th, 6th, and 7th — carrying water in plastic containers. Only God knows their condition. The situation is truly tragic.”
He concluded: “We are Libyan citizens with civil rights, one of which is the provision of housing by the State.”
Our exclusive sources revealed that there are reports about the resignation of the General Manager of the National Commercial Bank, Ali Al-Khuwaildi, from his position.
According to the sources, the Deputy General Manager has been assigned to take over the role.
Our source has exclusively obtained a letter from the Secretary-General of the Council of Ministers of the Government of National Unity to the Minister of Finance regarding the correspondence of the Chairman of the Management Committee of the Development Bank, which included a request to release the accounts frozen at the Libyan Foreign Bank based on a previous order from the former Minister of Finance of the Government of National Accord.
The correspondence included instructions from Abdulhamid Dbeibeh to release the Development Bank’s accounts in dollars and euros.
The Governor of the Central Bank of Libya, Naji Issa, stated regarding the Banking Investment Initiative that it is not necessarily meant to be implemented next month, but rather to be ready as part of a broader vision. He emphasized that without a comprehensive economic vision aligning all policies and defining real objectives, such a project cannot achieve its goals. “The Central Bank’s initiative is one we are ready for today — a prepared document and project — but without restructuring and reforming Libya’s economy, no initiative will achieve its purpose. The Central Bank cannot operate independently in all areas, even in monetary policy,” he said.
Issa added: “Without the oil sector, we have no economy. We have initiatives, and the private sector is striving, but it faces many challenges. If oil prices drop to $52 per barrel, the state won’t be able to pay salaries. We must ask: What will Libya’s economy look like in the next three years? Will the state continue employing more than 2.5 million people in the public sector and spending 80 billion on salaries at the expense of development funding?”
He further noted that while government development projects have added value, they are not productive value-added projects and thus cannot be financed by the Holding Company. The credit extended by banks — often seen as consumer loans — actually covers citizens’ income deficits, since incomes have remained low for decades. “If we do not increase citizens’ purchasing power, private sector investments will not find the demand needed to consume the goods and services produced. Stimulating credit and purchasing power is what drives growth itself,” Issa explained.
He continued: “The banking sector is fulfilling its role, though there are shortcomings — not due to the Central Bank, but because of the circumstances we face. The situation and environment are not ideal for designing monetary or economic policies.”
Issa also pointed out that he is working with two governments — not by choice, but as a reflection of reality on the ground. “The Ministry of Economy is divided, the Ministry of Finance is divided, and so are all state institutions. How can we establish a Holding Company and launch it next month amid this division? Even political division has imposed a reality on the Central Bank. Everyone blames the banking sector and the Central Bank, but there are no magical solutions without a unified vision and functioning state institutions,” he said.
He revealed that the state currently needs around $3 billion based on current spending rates, while net revenues deposited in the Central Bank may not exceed $1.5 billion, posing a major fiscal challenge.
Issa concluded: “We have demands from traders, the private sector, and banks. We all hope that problems will be solved and citizens can live in prosperity — this is our goal and the government’s goal — but the current reality limits these solutions. The banking sector and the Central Bank are under pressure, yet hope remains in the initiatives that will soon be implemented.”
Assaray Trade and Investment Bank has recorded notable growth and outstanding financial results throughout its journey. The Chairman of the Board, Dr. Ahmed Atiga, and the General Manager, Farouk Al-Obaidi, presented the bank’s overall performance indicators, which reflected significant growth across various banking and investment activities. These include increases in assets, financing, deposits, and customer base, resulting in a net profit of 26% of the share’s nominal value, or about 9% return on equity, estimated at 325 million dinars, excluding the revaluation of fixed assets and goodwill.
The market price evaluation of ATIB’s shares, conducted by the international consulting firm KPMG, showed that the average fair value per share was estimated at 93 dinars, with an upper limit of 110.4 dinars and a lower limit of 76 dinars. This reflects the confidence of financial institutions in the bank’s performance and the sustainability of its growth.
Founded in 2005, ATIB is one of the leading institutions that have contributed to the development of modern and electronic banking services, enhancing the local investment environment.
Among the general assembly’s recommendations was the “unlimited support from shareholders to adopt technology and embrace continuous innovation, making ATIB a technologically advanced institution par excellence.”
Economic expert Idris Al-Sharif told our source exclusively: “The Libyan economy is a simple cash-based economy. Despite efforts to expand electronic payment services, which have achieved remarkable success over the past year, the preference for liquidity—arising from the fact that many economic activities and transactions can only be conducted in cash—forces citizens to seek cash even if it costs them part of their limited income, through practices known as ‘burning checks’ or accepting a lower cash amount.”
He added: “Almost all types of services—especially those related to foreign labor in construction and various trades, private education and healthcare services, real estate rentals (shops or residences), and simple retail trade—require immediate cash payments.”
He also said: “Therefore, the scenes of people crowding banks and standing (reluctantly) in long queues at ATMs should not be imagined as mere entertainment or a way to pass time!”
He continued: “At the same time, it cannot be ignored that most shadow economy activities—both legal and illegal—which make up a large portion of the economy, strongly prefer not to deal through the banking system (in dinars or dollars) and will continue to use cash regardless of how much electronic services expand.”
▪︎ “The Central Bank is aware of all these facts!”
It was expected that when the Bank decided to withdraw more than twenty billion dinars (in three denominations), (and it may have had valid reasons), it would at least consider printing half of this amount to replace the withdrawn value to prevent the crippling crisis we are witnessing today.
▪︎ “Now that the situation has occurred, the short-term option is to accelerate the printing of currency to compensate for a large portion of what was withdrawn. The Central Bank should know or anticipate that any amount distributed will not easily return to the banks under current withdrawal restrictions and fees, and that people will understand it will not be replaced in the short or medium term, at least!”
He added: “Therefore, the Central Bank must rebuild the collapsed trust between the public and the banking system it supervises. In this context, it could announce that anyone depositing new funds in a bank can withdraw them anytime, in full, without restrictions or fees, while maintaining the restrictions and fees on previous balances and deposits if necessary.”
▪︎ “It should be noted that total bank deposits have exceeded 112 billion dinars—more than double the value of currency in circulation in the market, approximately 54 billion dinars, according to the latest economic bulletin issued by the Central Bank.”
He concluded: “The banking system has failed to reinvest its excess deposits, which amount to over 80 billion dinars (after the mandatory reserve), and to inject them into the economy in the form of investments (the primary function of banks), even though the Libyan economy suffers from unemployment and poor use of resources. The reasons are well known, many of which are beyond the control of the banking system, which obviously cannot risk depositors’ funds without guarantees in an unfavorable and highly risky investment environment.”
Our source has obtained a copy of the Customs Authority’s circular initiating the implementation of procedures to completely ban the entry of any goods through customs ports unless they are tied to documented banking operations (letters of credit – direct transfers – collection-based documents).
This comes as Minister of Economy in the Government of National Unity, Mohamed Al-Huwaij, had previously issued a circular delaying the enforcement of the decision until a meeting could be held with various entities — a move that reflects confusion and inconsistency in issuing and retracting his decisions.
Noaman Al-Bouri, a shareholder in Al-Saray Bank for Trade and Investment (ATIB), extended his sincere congratulations to the bank’s newly appointed board of directors, expressing strong confidence in their ability to lead the institution toward greater progress, innovation, and institutional excellence.
Speaking to our source, Al-Bouri said: “As a shareholder in the bank, I’m pleased to see a professional and experienced board taking charge. I know each member personally and have full confidence in their vision and capabilities. I am certain they will make a significant impact and help position ATIB at the forefront of banking innovation in Libya.”
He emphasized that this legitimate board is a far better alternative to the temporary committee, which the judiciary has already ruled illegitimate.
Al-Bouri also voiced his optimism about the bank’s future, underlining the importance of this phase and the board’s role in enhancing governance, driving digital transformation, and restoring the confidence of partners, shareholders, and clients: “This is a critical moment in the bank’s history. With the right leadership in place, I believe Al-Saray is well positioned to lead the sector toward a more transparent, trusted, and customer-centered future.”
He affirmed his full support for the new board and wished them success in their upcoming journey.
Al-Bouri further stressed that legal proceedings will continue against those involved in the abuse of power and the defiance of judicial rulings: “These are serious violations, and legal action will persist until full justice is served.”
He reaffirmed that the objective of these legal actions is to ensure such misuse of authority is never repeated. He also pointed to recent court rulings in favor of the original board, including a verdict from the Court of Appeals.
In conclusion, Al-Bouri reaffirmed his unwavering commitment to the rule of law and the independence of the judiciary, stating that these are non-negotiable principles under any circumstance.
