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The Central Bank of Libya Moves with International Weight: Major Partnerships and Upcoming Reforms

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The Governor of the Central Bank of Libya, Mr. Naji Issa, held a series of important meetings during his recent visit to the United States, on the sidelines of the IMF and World Bank Annual Meetings.

One of the key meetings was with J.P. Morgan Bank, marking a strategic step aimed at achieving several goals:

  • Foreign Reserves Management: Supporting the safe and effective investment of state funds to preserve and grow their value.
  • Access to Global Markets: Opening financial and investment channels for Libya in international markets.
  • Training and Knowledge Transfer: Providing training programs for Libyan professionals in economics, risk management, and financial analysis.
  • Fintech Development: Supporting the modernization of payment and transfer systems and strengthening Libya’s banking infrastructure.
  • Boosting International Confidence: Enhancing Libya’s financial image and attracting global banks and investors for cooperation.

This step is seen as a genuine starting point for improving Libya’s economy and enhancing its foreign relations.

The governor also met with Kenji Okamura, Deputy Managing Director of the IMF, to discuss the outcomes of Article IV consultations, the efforts of Libyan institutions in providing data and information, and the governor’s initiative to address Libya’s structural economic imbalances through a proposed package of reforms. These include the unification of public spending, review of fiscal and trade policies, and received a warm welcome from IMF representatives, who expressed readiness to provide technical support, especially in exchange rate policy and enhancing the value of the Libyan dinar.

In another meeting, the governor was hosted by the American Business Association to discuss economic developments and Libya’s business and investment climate. He assured attendees that foreign currency sales and letters of credit operations are proceeding normally, reaffirming the central bank’s commitment to economic stability.

Additionally, the governor met with the Vice President of the World Bank for Investment, discussing potential cooperation in capacity building, training of Libyan personnel, and market trend analysis. They also proposed launching a leadership development program aligned with the Central Bank’s future vision.

Other key meetings included:

  • A session with Osman Dione, World Bank Vice President for MENA, focusing on recovery and economic reform priorities, financial inclusion, the development of e-payment systems, and support for SMEs.
  • A meeting with senior executives from Visa and MasterCard to explore enhancing financial inclusion, expanding digital payment services, and ensuring financial transactions comply with anti-money laundering and counter-terrorism financing standards.

Regional Participation:
The governor also took part in the meeting of central bank governors and finance ministers of the MENAP region (Middle East, North Africa, Afghanistan, and Pakistan), where participants addressed regional economic issues, strategies to absorb recurring economic shocks, and anti-inflation policies. The session was chaired by IMF Managing Director Kristalina Georgieva.

Further Engagements:
Governor Issa also met with the IMF’s Director of the Middle East and Central Asia Department, where they discussed Libya’s latest economic developments and the governor’s short- and long-term vision for crisis resolution. The IMF team praised the Central Bank’s efforts in addressing liquidity shortages and achieving local consensus on urgent economic reforms.

In Conclusion:
Attendees reaffirmed the importance of local and international support for the governor’s initiative, viewing it as a promising step toward achieving economic stability and improving Libya’s financial indicators.

Exclusive – Central Bank Source to Sada: The Battle with Top Traders Reaches Breaking Point After Consecutive Blows… Details Inside

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Our source from the Central Bank of Libya revealed that the Bank’s battle with major traders has reached a breaking point, as Governor Nagy Issa has dealt a series of successive blows to currency dealers, inflicting heavy losses. As a result, some affected parties have launched media attacks and smear campaigns against the Bank and its governor.

The source added that Governor Nagy Issa succeeded in enforcing the decision to withdraw the 50-dinar note, which had become a safe haven for currency hoarding. He also managed to increase the value of the dinar and shrink the exchange rate margin from 8 to below 7 dinars — at a time when many had predicted the dollar would reach 10 dinars. This move was followed by the Central Bank’s announcement of the imminent withdrawal of the 20-dinar note, which had become the traders’ last resort due to its poor quality and susceptibility to forgery from being printed in Russia.

The Bank also announced its intention to regulate the currency market and empower licensed exchange companies and offices — effectively giving the Ministry of Interior the green light to take bold action and shut down unlicensed shops and offices in Souq Al-Mushir. The source concluded that the Central Bank is bound to prevail, but only through its own efforts and with sufficient support from the public.

Africa Intelligence: Under Washington’s Pressure, Libya’s Central Bank Hires Firm to Protect It from Suspicious Money Transfers

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The French intelligence website Africa Intelligence revealed on Thursday that the American consulting firm K2 Integrity will be auditing the payments of the Central Bank of Libya.

The French website confirmed that, under pressure from Washington, the Central Bank of Libya sought the services of K2 Integrity to oversee money transfers and help combat corruption.

Exclusive: Sources to Sada – Central Bank to Withdraw 5-Dinar (6th Issue) and 20-Dinar (Old Issues) Notes

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Our exclusive sources told that the Central Bank of Libya is set to withdraw the 5-dinar note from the sixth issuance and the 20-dinar notes from older issues.

The Central Bank will also impose a commission on large deposit amounts from these denominations after a grace period, which will be determined at a later date.

According to the sources, this move comes after ensuring the availability of the newer, more secure 5, 10, and 20-dinar notes. The goal is to eliminate older currency associated with suspicions of corruption, forgery, and improper printing.

Exclusive: Central Bank to Banks – Work on Friday and Saturday to Accept 50-Dinar Deposits

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Our source has exclusively obtained a circular from the Central Bank of Libya instructing commercial banks to continue operations on Friday and Saturday.

This measure is intended to give bank customers the opportunity to deposit 50-dinar banknotes, with the final deadline set for April 30.

Exclusive: Banking Operations Department Begins Processing April Salaries for Public Sector

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Our source at the Central Bank of Libya confirmed exclusively that the Banking Operations Department has officially started transferring April 2025 salaries today, Monday, April 21, 2025.

The salaries are being transferred to public sector institutions across the country.

This move is part of the Central Bank’s ongoing efforts to ensure timely salary disbursement for state employees.

Exclusive: Central Bank Authorizes Licensed Exchange Companies and Offices to Sell Foreign Currency with a 7% Profit Margin

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Our source has exclusively obtained a letter from the Director of the Banking and Currency Supervision Department at the Central Bank of Libya addressed to companies and currency exchange offices licensed by the bank.

The Central Bank issued instructions permitting these licensed companies and exchange offices to sell foreign currency with a 7% profit margin over the Central Bank’s official selling rate to commercial banks operating in Libya.

The exchange companies and offices will be subject to ongoing and regular monitoring, including field inspection visits, to assess their compliance with the Central Bank’s instructions. The Central Bank affirmed it will take legal action and enforce penalties as stipulated in Law No. (1) of 2005, which may include revoking the license of any company or office found violating these regulations.

As Part of Economic Reforms… Exclusive Sources to Sada: Central Bank Proposes Reducing Number of Libyan Embassies and Diplomatic Missions Abroad

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Our exclusive sources revealed that among the proposed economic reform package by the Central Bank of Libya is a recommendation to reduce the number of embassies and Libya’s diplomatic representation abroad.

The Central Bank of Libya had previously launched a set of reforms aimed at strengthening the value of the Libyan dinar and improving the country’s economic conditions.

Al-Zantouti to Sada: “The Tragic Dysfunction Cannot Be Fixed by Those Who Caused It”

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Financial analyst Khaled Al-Zantouti wrote to Sada Economic News:

Recently, many voices have risen calling for the need for financial and administrative reform, especially following the recent statement by the Central Bank Governor.

Here, I ask a somewhat innocent question: Where were some of these voices (and I do not generalize) that are now demanding public financial reform? Where were they all these years, despite repeated warnings about the dangers of financial and administrative disorder by some experts?

We saw nothing from executive officials—and perhaps some legislative ones—but a deepening erosion of even the most basic principles of governance and oversight in public finance. What’s even more baffling is that many of the voices now calling for reform come from those same executive and legislative authorities! Where were they? Did they only now notice this dysfunction? Only after the governor’s statement (the “inaugural speech”) just two weeks ago? Why didn’t they sit down together—with their experts and advisors—to try to address the catastrophe?

Sadly, they were preoccupied with their disgusting power struggles, through which they compete for spoils, using tools and bodies that have no legitimate foundation.

I say this: You cannot fix this tragic dysfunction using the same people who caused it, whether with good or bad intentions! You cannot kill the victim and cry at their funeral. You cannot fight corruption and mismanagement with the same corrupt individuals—both administratively and financially!

We must first return to the rule of law and apply it to everyone, without exceptions. Only then can we identify: Who? And for whom? Only then can we punish the wrongdoer and honor the innovator. Through that, true, sincere, and purposeful reform will begin.

Anything else? We’ll just be plowing the sea—and continuing to lament over ruins.

Exclusive: After Cancelling the Barter System, Fuel Imports to Proceed via Letters of Credit – Details Inside

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Our exclusive sources revealed that following the cancellation of the barter system today, the new mechanism for importing fuel will now be conducted through opening letters of credit with companies that previously supplied fuel. This new system takes effect starting today.

The Prime Minister of the Government of National Unity had affirmed to the Governor of the Central Bank of Libya the necessity of ending the barter system and transitioning to an alternative mechanism.

Exclusive: Central Bank Governor Continues Implementing a Package of Economic Reforms

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The Governor of the Central Bank continues to lead a package of economic reforms and holds meetings with governments in both the West and East, as well as with officials across all Libyan cities, to strengthen the Libyan dinar and improve the country’s economic situation.

The first steps toward change have already been achieved, notably the termination of the currency swap mechanism, the unification of spending through the adoption of the general budget, and the preservation and stabilization of reserves from depletion.

Among them is the expectation of GDP growth.. IMF Mission Publishes Important Report on Libya’s 2025 Economic Outlook

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The International Monetary Fund (IMF) mission released its concluding statement for 2025 on Libya, which includes the preliminary findings of the IMF team at the end of its official visit to Libya—an annual consultation conducted under Article IV of the IMF Agreement.

The statement said that the dispute over the leadership of the Central Bank last August, along with the disruption in oil production, negatively impacted growth in 2024. It is estimated that production contracted due to a forced decline in GDP from hydrocarbon resources. However, this was partially offset by an increase in non-oil activities, fueled by continued government spending. After the dispute was resolved, oil production recovered and is now approaching 1.4 million barrels per day.

It added: Official inflation stood at around 2 percent in 2024, reflecting the broad subsidies on goods and services. However, this figure was affected by data measurement issues. Subsidized goods and services make up about one-third of the Consumer Price Index (CPI), which was based on an outdated consumption basket covering only Tripoli. This likely led to an inaccurate estimation of inflation due to significant price differences across Libya’s regions. The Bureau of Statistics and Census has now released an updated CPI with wider geographic coverage and revised weights.

Preliminary estimates indicate a budget and current account deficit in 2024. Government spending continued to rise amid falling oil revenues due to production and export stoppages. It is estimated that the current account shifted from a large surplus in 2023 to a deficit in 2024 due to reduced hydrocarbon exports, while imports remained largely unchanged. Reserves stayed at comfortable levels, supported by the revaluation of gold holdings at the Central Bank of Libya.

The banking sector managed to raise capital and strengthen its financial soundness indicators. In late 2022, the Central Bank required banks to increase their capital to comply with Basel II regulatory requirements. Most banks met their targets in 2024, resulting in a doubling of paid-up capital. Additionally, banks’ financial soundness improved significantly, with better ratios of non-performing loans. Private sector credit growth remained strong in 2024, particularly in the form of Murabaha financing for individual clients and salary advances for public employees, while corporate financing remained limited.

The economic outlook will be driven by developments in the oil sector, with real GDP expected to grow in 2025, mainly due to expanded oil production, before slowing down in the medium term. Growth in non-hydrocarbon activities is expected to remain around the 2021–2024 average (5–6 percent) throughout the forecast period, supported by continued government spending.

Current account and budgetary pressures are expected to persist in the medium term, driven by projected declines in oil prices and ongoing government demands to fully spend oil revenues. The outlook is subject to a high degree of uncertainty, with risks skewed to the downside, especially due to domestic political instability, oil price volatility, intensifying regional conflicts, and deepening geo-economic fragmentation.

Efforts to establish a unified budget should remain a top priority, as this would help set spending priorities and strengthen fiscal credibility. In the meantime, authorities should resist pressure to increase current spending, particularly on wages and subsidies. They should also enhance public financial management, including through stronger macroeconomic coordination within the Ministry of Finance.

In the medium term, significant fiscal efforts will be necessary to maintain sustainability and intergenerational equity, including through disciplined reforms in wages, energy subsidies, and non-hydrocarbon revenue collection.

The Central Bank of Libya devalued the dinar by about 13 percent in early April and imposed further restrictions on foreign exchange to relieve pressure on reserves. In the absence of traditional monetary policy tools, controlling fiscal spending remains the preferred policy response under Libya’s macroeconomic framework.

However, given Libya’s fragile political stability and institutional fragmentation, addressing spending pressures in the short term may not be feasible. Authorities should work to narrow the gap between the official and parallel exchange rates, including by phasing out the foreign exchange tax and easing currency restrictions, while maintaining international reserves.

The Central Bank of Libya needs to develop an effective domestic monetary policy framework with a defined policy rate that can serve as a benchmark for banks in Libya. This framework would allow the Bank to respond to changes in macroeconomic conditions, ease repeated downward pressures on the Libyan dinar, and provide a benchmark for credit pricing by banks and financial institutions.

The recent efforts by the Central Bank of Libya to inject new banknotes, promote electronic payments, and accelerate financial inclusion are a welcome step. However, more work is needed to address the cash accumulation problem and restore trust in the financial sector. Improving transparency, accountability, and financial literacy, along with developing attractive savings plans, will be key to boosting credit supply to the private sector. Authorities must continue to strengthen the anti-money laundering and counter-terrorism financing (AML/CFT) framework to support the stability of correspondent banking relationships and overall economic stability. The legal framework should align with international standards, and AML/CFT risk mitigation should be appropriately coordinated and risk-focused.

To stimulate economic diversification in Libya, it is essential to address the challenges facing the private sector. Informal employment remains high due to ongoing political instability and a weak business regulatory framework. Limited access to finance and foreign currency, public sector dominance, and poor governance are key barriers to growth in Libya. Banks continue to lack a defined framework for credit expansion since the passage of the interest prohibition law. Authorities must initiate a comprehensive economic reform plan focused on private sector development, beginning with updating regulatory frameworks, improving access to finance, and enhancing the security situation.

Governance reforms will be critical to support sustainable growth. Positive steps taken by the Central Bank to improve the banking governance framework are welcome. Additionally, efforts to combat corruption—such as the publication of the Libyan Audit Bureau’s annual reports and the adoption of a national anti-corruption strategy—are notable. However, significant governance gaps remain in the management of state-owned enterprises, public spending, rule of law, and overall state fragility. Addressing these issues in a timely manner will help create a better business environment and a more vibrant private sector. The next Article IV consultation mission is expected in Spring 2026.

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Exclusive: Details of Central Bank’s Instructions on Launching Unrestricted Mudarabah Deposit Certificates

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Our source has obtained the Central Bank of Libya’s instructions to banks regarding the launch of unrestricted Mudarabah deposit certificates, which are intended to invest customers’ balances in investment accounts at Libyan banks. These certificates, issued by the Central Bank of Libya to commercial banks, carry an expected annual return of 5.5% for the banks.

According to the circular, banks will issue unrestricted Mudarabah deposit certificates to their clients who hold investment accounts, for the same terms and durations announced by the Central Bank. These are specifically designated for the balances in clients’ investment accounts, with an expected annual return of 5% for customers.

These certificates are defined as a Sharia-compliant investment instrument (based on the Islamic Mudaraba system), meaning that customers can invest their funds (only from investment accounts) through them.

  • Expected return for customers: Approximately 5% annually
  • Return for banks (from the Central Bank): Approximately 5.5%

In simpler terms, a citizen who has an investment account in any bank can purchase one of these certificates. The bank then invests the money on behalf of the citizen, and at the end of the term, grants them the expected profits. The entire process is supervised by the Central Bank of Libya to ensure transparency.

Exclusive.. Central Bank Reveals to Sada That the Governor Will Not Attend the Upcoming Parliament Session Due to a Mission Abroad — Will Submit an Economic Reform Memo to Both Governments

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Our responsible source at the Central Bank confirmed exclusively that the Governor had informed the Speaker of the House of Representatives days ago that he would be traveling on an official mission, with a pre-scheduled meeting attended by his deputy, Central Bank directors in Tripoli and Benghazi, and representatives from Libyan ministries, agencies, and institutions, along with the IMF expert mission. Therefore, he will not be able to attend Tuesday’s session.

The source added: “However, he will submit to the House of Representatives a package of rapid economic reforms for both governments, which — if implemented — could completely pull the country out of this crisis, provided all concerned parties cooperate.”

Exclusive: Hosni Bey to Sada: The Central Bank Should Follow the Libyan Saying: “Bring in Revenue Before Spending and Then Talk”

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Libyan businessman Hosni Bey told our source that the failure of states and their economies generally stems from distortions caused by public spending policies. He continued, saying the primary drivers of failure and distortions are:

  • Public spending that exceeds government revenues.
  • Central banks financing the general budget by creating money from nothing—whether through printing or virtual entries—known as Helicopter Money.

According to Hosni Bey, the Central Bank of Libya possesses all the necessary tools to achieve its core objectives. The key condition for the success of monetary policies is the first commitment: no monetary financing of public budgets and no lending to governments—neither in Libyan dinars nor in any other currency—so that governments are forced to implement austerity measures.

He added: The Central Bank should follow the Libyan proverb: “Bring in revenue before spending and then talk.”
He also stated that the Central Bank holds reserves estimated at $90 billion and is capable of buying back 100% of the dinars in circulation by selling only $30 billion, leaving reserves exceeding $60 billion.