Skip to main content

Tag: central bank

Commenting on the Central Bank of Libya’s Letter to the Audit Bureau: Mrajaa Ghaith Says the International Working Group Began Its Review Months Ago and Expressed Concerns, but the Matter Was Taken Lightly

Written by Amira Cherni on . Posted in News. No Comments on Commenting on the Central Bank of Libya’s Letter to the Audit Bureau: Mrajaa Ghaith Says the International Working Group Began Its Review Months Ago and Expressed Concerns, but the Matter Was Taken Lightly

Former Central Bank of Libya board member, Mrajaa Ghaith, commented to our source regarding the letter sent by the Central Bank to the Audit Bureau. He stated that these issues had been repeatedly highlighted in the past, referencing the Global Witness report that revealed corruption in letters of credit. He also warned about the risks associated with the “Family Heads Grant,” emphasizing that it should have been disbursed in Libyan dinars. Allowing citizens to sell dollars without controls over how the currency is used or identifying the real buyers posed significant risks.

The international audit report highlighted its inability to access the letters of credit system, further indicating a lack of control over the use of foreign currency. The government’s cancellation of its agreement with a company monitoring letters of credit raised suspicions about its capability to combat money laundering and terrorism financing. The international working group initiated a review process months ago, expressed concerns, but the matter was not taken seriously.

Ghaith added: “The way the letter was leaked, which is unethical, has raised doubts about the Central Bank’s continued ability to process and approve dollar transactions through the U.S. Federal Reserve system. Perhaps some are unaware that all dollar transactions pass through specific systems in the United States, with a focus typically on countries experiencing instability. The political factor in this field cannot be overlooked.”

Exclusive: Commenting on the Central Bank’s Correspondence with the Audit Bureau, Husni Bey: “It’s Just a Storm in a Teacup, and the Bank Is Trying to Comply and Mitigate Risks”, Saying: “The Fault Lies with Us”

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Commenting on the Central Bank’s Correspondence with the Audit Bureau, Husni Bey: “It’s Just a Storm in a Teacup, and the Bank Is Trying to Comply and Mitigate Risks”, Saying: “The Fault Lies with Us”

Libyan businessman Husni Bey stated exclusively to our source: “What is being circulated about the Central Bank’s request to the Audit Bureau is nothing more than a ‘storm in a teacup.'”

He continued: “The Federal Reserve has not suspended any transactions related to Libya, nor has it threatened any immediate or urgent suspension. All it requires is an independent auditing office to conduct post-transaction reviews and monitor the use of Libya’s dollars by Libyan banks and the Central Bank in terms of transparency and combating money laundering and illicit activities.”

Bey added: “The requested measure is merely formal, natural, and objective—especially in a country like Libya, where the parallel market, speculation, and trade outside the banking system through personal cards and cash account for approximately 50% of the economic activity.”

He explained: “The U.S. Federal Reserve’s concerns stem from institutional division, deficit spending, the absence of an approved budget, and the lack of consensus on financial arrangements. This is compounded by allegations of undisclosed public funding sources, oil-for-fuel barter agreements, fuel smuggling, and other irregularities highlighted in the Audit Bureau’s reports. Fuel smuggling, which has become a contentious activity due to price disparities exceeding 3,000%, exacerbates these issues.”

Bey concluded: “We must admit that the fault lies with us. We need to work on unifying the budget or agreeing on financial arrangements, while also taking decisions to limit cash transactions—even criminalizing cash dealings above a certain amount, such as 50,000 dinars.”

He wrapped up his remarks by reiterating: “It is a storm in a teacup, and the Central Bank, through its correspondence with the Audit Bureau, is trying to comply with the request and reduce concerns and risks.”

Exclusive: Mrajaa Ghaith Explains That the Message on Financial Challenges Focuses on the 2025 Budget, Not the Overall Libyan Economy, with Some Side Proposals

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Mrajaa Ghaith Explains That the Message on Financial Challenges Focuses on the 2025 Budget, Not the Overall Libyan Economy, with Some Side Proposals

Mrajaa Ghaith, former board member of the Central Bank of Libya, clarified in his statement to our source regarding the open letter signed by several experts about the financial challenges facing the Libyan state. He stated that the paper is mainly related to the preparation and implementation of the 2025 budget. Its purpose is to encourage the parties involved to agree on a budget that will serve as the basis for spending in the coming year, along with measures to reduce waste, unnecessary spending, and to encourage the collection of the state’s rightful revenues. However, it does not address the overall issues of the Libyan economy, but rather focuses on the 2025 budget with some additional proposals.

Ghaith also stated: “The success of the recommendations depends on the seriousness of the parties in control of the state, and whether they have the will to combat waste and excessive spending without adhering to laws and spending through an approved budget, or whether spending will continue based on personal interests and desires.”

Exclusive: Central Bank Governor Requests Shakshak’s Approval to Initiate Contracting with a Specialized Company for Continued Engagement with the Federal Reserve Bank

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Central Bank Governor Requests Shakshak’s Approval to Initiate Contracting with a Specialized Company for Continued Engagement with the Federal Reserve Bank

Our source has exclusively obtained a correspondence from the Governor of the Central Bank of Libya to the President of the Audit Bureau. In this letter, the Governor indicated that the Central Bank of Libya executes foreign exchange transactions and all transfers in US dollars through the Federal Reserve Bank in New York, which is the mandatory intermediary for all dollar-denominated transactions.

The Governor stated that the Federal Reserve Bank of New York has informed the Central Bank of Libya that it will suspend its dealings with the Central Bank of Libya (and the Libyan Foreign Bank) concerning the execution of commercial operations unless a mechanism for reviewing such transactions through an independent specialized company, referred to as a Third-Party Monitor, is established and approved by the Federal Reserve Bank.

He further explained that severing ties with the Federal Reserve would mean the suspension of all dollar transactions, as the Federal Reserve is the clearinghouse for dollar transactions with all international correspondents. Such suspension would lead to significant financial losses and expose the Bank to risks regarding transactions in other currencies, as well as reputational damage with international financial institutions.

The Governor emphasized that every effort had been made to dissuade the Federal Reserve from taking this action, most recently during a meeting in Tunis on December 13, 2024. The meeting was attended by the Governor, his deputy, and several board members, along with the Federal Reserve team and a representative from the U.S. Treasury Department. During the meeting, it was made clear that the U.S. Treasury supported the Federal Reserve’s demand. The best outcome achieved was a delay in implementing the suspension until the Libyan authorities approved the required review mechanism.

The proposed mechanism involves establishing a specific arrangement for post-payment reviews of dollar transactions. This would be entrusted to an independent specialized company with expertise in providing financial monitoring services, particularly in the areas of anti-money laundering and counter-terrorism financing, in accordance with international standards. The terms and details of this review mechanism would be subject to negotiations between the Central Bank of Libya and the selected company. This mechanism would grant the contracted auditing firm access to data related to commercial transactions, including supplier and importer information. It is worth noting that most of this data is already published monthly on the Central Bank’s website.

In conclusion, the Governor stated that, based on the above and in light of Article 25 of the Banking Law, which entrusts the Audit Bureau with auditing the Central Bank’s accounts, and considering that the Bureau had previously approved Deloitte’s auditing of the Central Bank’s accounts in Tripoli and Benghazi, he requested approval to proceed with contracting one of the specialized companies. This would enable the implementation of the required regulatory framework under optimal conditions for the benefit of the Central Bank and Libya as a whole. It would also ensure continued engagement with the Federal Reserve in line with transparency and international compliance requirements. The Governor pledged to update the Audit Bureau on any further developments in this matter.

Exclusive: Al-Yaqeen Bank Operates Normally, Resumes Services with Growing Momentum, and Outlines Plans for 2025

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Al-Yaqeen Bank Operates Normally, Resumes Services with Growing Momentum, and Outlines Plans for 2025

Esam Hamza, the Director of the General Manager’s Office at Al-Yaqeen Bank, announced that the bank is operating smoothly and at an accelerated pace in the final quarter of 2024.

Mr. Hamza emphasized that all products and services were fully reinstated in October, in line with the directives and circulars from the Central Bank of Libya. He highlighted that the bank continues to offer high-quality electronic services designed to save time and effort for both individual and corporate customers.

Looking ahead, Hamza noted that 2025 will be a landmark year for the bank, as it prepares to roll out a new range of advanced electronic services and self-service machines. These innovations will enable customers to access most services without the need for paperwork or direct assistance from bank staff.

Misbah Al-Akari: “Under These Conditions, the Liquidity Problem Will Be Fully Resolved by 2025”

Written by Amira Cherni on . Posted in News. No Comments on Misbah Al-Akari: “Under These Conditions, the Liquidity Problem Will Be Fully Resolved by 2025”

Former member of the Central Bank of Libya’s Exchange Rate Committee, Misbah Al-Akari, stated: “The liquidity problem will be fully resolved by 2025 provided that all stakeholders (citizens, the private sector, and government entities) commit to using alternative payment tools, which have already become widely available and are expected to grow even further in 2025. This will be supported by additional incentives, such as significantly reducing fees and enabling citizens to use up to 60% of their salaries via these tools when due.“

Al-Akari added: “When everyone commits to adopting this modern approach to transactions, the long queues of humiliation will become a thing of the past. These tools will ensure fairness, eliminate favoritism in cash withdrawals, and curb the financing of currency speculators, which has led to a 35% discrepancy in the Libyan dinar’s exchange rate on the investment side.“

Clarifying the steps for implementing these modern tools, Al-Akari explained: “Activating the unrestricted Mudarabah (Islamic finance product) will allow commercial banks to invest their excess funds with the Central Bank, increasing their revenues and enabling them to further reduce fees for their clients. Additionally, this product will provide commercial banks the opportunity to open investment accounts and restricted Mudarabah products for their customers, creating an investment-friendly environment. Citizens and business owners will be able to utilize such products to grow their funds. These investments will have significant positive effects not only for the investors themselves but also for the Libyan economy as a whole. Moreover, these investments will help absorb a considerable portion of the money supply, the primary driver of foreign currency price increases.“

Al-Akari further noted that by 2025, after mitigating and eventually resolving the liquidity problem and expanding electronic services to reduce congestion at banks, the banks will be well-positioned to return to their fundamental role as financial intermediaries. They will then be able to offer loans and facilities for both small and large-scale projects, contributing to greater diversification of the Libyan economy through these financial tools.

The insistence of the Central Bank of Libya on the shift to electronic transactions, which is supported by all experts and specialists in this field, is due to the following reasons:

  1. Electronic payment tools directly eliminate the need for paper currency except in limited contexts.
  2. This transformation reduces overcrowding at banks.
  3. It enables banking services to be accessed from home or the office without visiting a bank.
  4. It puts an end to corruption associated with cash withdrawal operations.
  5. It provides statistical data that can be used for studies relevant to the national economy.

Al-Akari: Causes and Solutions Regarding the Circulation of Over 70 Billion Dinars in Cash Outside the Banking System

Written by Amira Cherni on . Posted in Post Of The Week. No Comments on Al-Akari: Causes and Solutions Regarding the Circulation of Over 70 Billion Dinars in Cash Outside the Banking System

The economic expert, Misbah Al-Akari, wrote an article in which he stated: “An amount of cash exceeding 70 billion Libyan dinars is circulating in the local market outside the banking system. This massive amount has become subject to trading in a very peculiar phenomenon referred to as “burning.”

The rise in government spending, which surpassed 84 billion dinars—of which 57 billion is allocated to salaries—has necessitated the availability of rapid payment tools to avoid further financial complications, including the ongoing liquidity issue. Addressing this challenge requires introducing the payment tools available in the Libyan banking system, which include:

  • RTGS (Real-Time Gross Settlement) system: Allows transferring unlimited amounts between customer accounts for transactions exceeding 10,000 dinars.
  • ACH (Automated Clearing House) system: Functions similarly to RTGS but is used for transactions below 10,000 dinars.
  • Certified checks: Up to 250,000 dinars.
  • Electronic and traditional checks: Electronic checks are preferred due to their fast clearance (within 24 hours), while traditional checks are being phased out.
  • Internal transfers within the same branch: Upon customer request.
  • Electronic payment methods.
  • Bank cards: Issued by Libyan banks, usable at ATMs and POS devices. With the activation of the Off-US service, all bank cards can be used across different banks’ ATMs and POS devices.
  • Banking apps: Available at all banks, offering various services such as money transfers, balance checks, transaction history, and card purchases.
  • LY PAY and ONE PAY services: These allow money transfers between customer accounts across banks.

The Central Bank of Libya reported the following results for these payment tools:

  • Number of checks: 2,890,587 checks amounting to 96 billion dinars.
  • Bank cards: 4,754,518 cards with total transactions worth 19.9 billion dinars.
  • App subscribers: 3,111,952 users generating transactions valued at 84.9 billion dinars.
  • POS devices: 72,769 devices.

A total of 121 million electronic transactions were conducted, amounting to 104.9 billion dinars. Meanwhile, cash distribution this year reached 59 billion dinars.

From these figures, it is evident that the solution to the liquidity problem lies in gradually transitioning to alternative payment tools, as detailed above. This would reduce dependence on cash. Currently, cash withdrawn from banks is spent in retail stores and does not return to the banking system. Instead, it becomes a traded commodity, often resold to citizens at a markup of up to 35%.

Despite the governor’s directives for commercial banks to reduce fees to 1–1.5%, Libyan citizens still complain about high fees. This is attributed to clear exploitation by some retailers and non-compliance by certain banks with these instructions.

We urge the Banking Supervision Department to monitor the issue of fees and call on relevant authorities to address the exploitation of excessive fees by some merchants. Strict enforcement can help support this strategic transition to alternative payment methods.”

Exclusive: Central Bank of Libya Sends Cash Shipment to Benghazi

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Central Bank of Libya Sends Cash Shipment to Benghazi

The Central Bank of Libya revealed to our source that it has dispatched a cash shipment from Tripoli to Benghazi to support the treasury of the Central Bank of Libya in Benghazi.

This move is part of the Central Bank’s strategy to address the cash shortage crisis, under the directives of the Central Bank Governor and his deputy.

Exclusive: Upcoming Meeting of the Central Bank Board of Directors Next Sunday to Discuss Exchange Rate and Tax

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Upcoming Meeting of the Central Bank Board of Directors Next Sunday to Discuss Exchange Rate and Tax

Our sources within the banking sector have revealed that the Board of Directors of the Central Bank of Libya is scheduled to hold a meeting next Sunday.

According to the sources, the discussion will include the topics of the exchange rate and taxes.

Exclusive: Central Bank of Libya Approves Covering the Deficit and Paying November Salaries to Avoid Delay

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: Central Bank of Libya Approves Covering the Deficit and Paying November Salaries to Avoid Delay

The Central Bank of Libya has confirmed, in a statement to our source, that the Bank’s Operations Management has started processing salaries after receiving them today from the Budget Department of the Ministry of Finance.

This comes after the approval of the Governor of the Central Bank to cover the deficit using the Bank’s resources, in order to avoid any delays in salary disbursement to citizens.

Addressing Exchange Rates, Economic and Banking Conditions: IMF Issues Key Statement on Meetings with the Central Bank of Libya and Recommendations

Written by Amira Cherni on . Posted in Reports. No Comments on Addressing Exchange Rates, Economic and Banking Conditions: IMF Issues Key Statement on Meetings with the Central Bank of Libya and Recommendations

The International Monetary Fund (IMF) welcomed the agreement to resolve the leadership dispute at the Central Bank of Libya (CBL) and expressed its support for the bank’s efforts to facilitate access to foreign currency and alleviate local currency shortages.

The IMF emphasized the importance of Libyan authorities agreeing on spending priorities through a unified budget for 2025.

A team led by Mr. Dmitry Gershenson visited Tunis from December 2-6 to discuss Libya’s recent economic developments, macroeconomic forecasts, and policy priorities.

Mr. Gershenson stated that the September resolution of the CBL leadership dispute, supported by UNSMIL and other international partners, marks a significant step forward. A new governor and board were appointed, ending a decade of deadlock.

The IMF noted the need for structured leadership transitions to enhance stability and governance and welcomed continued collaboration with the CBL and other authorities.

The team discussed Libya’s macroeconomic adjustments following disruptions in oil production during August and September. GDP growth and financial projections for 2024 were revised downward, but 2025 growth is expected to rebound with increased oil production.

The IMF highlighted the risks of lower oil prices and political tensions, stressing the need for a unified budget for 2025. Fiscal discipline remains a priority, as outlined in the Article IV Consultation Report for 2024.

Efforts to modernize monetary policy tools were also discussed to improve the CBL’s role in managing the foreign exchange market. Key steps included reducing the foreign exchange tax, expanding personal allowances, and narrowing the gap between official and parallel exchange rates.

The IMF praised the CBL’s measures to address currency shortages by injecting liquidity and promoting electronic payment services. Structural and subsidy reforms, including energy subsidy adjustments, were highlighted as essential for diversifying Libya’s economy and supporting long-term growth.

The IMF also commended progress in governance, AML/CFT frameworks, and data collection. It reiterated its commitment to providing technical assistance in areas like tax policy, budget preparation, and monetary policy.

The next Article IV mission is planned for April 2025.

Over 23 Billion Dollars in Total: Foreign Currency Uses According to the Central Bank Statement

Written by Amira Cherni on . Posted in News. No Comments on Over 23 Billion Dollars in Total: Foreign Currency Uses According to the Central Bank Statement

A statement from the Central Bank of Libya revealed the total uses and obligations of foreign currency, which amounted to $23.193 billion.

The statement outlined various uses, including salaries for Libyan workers abroad, which totaled $270 million, and medical treatment abroad at $99 million. The National Oil Corporation received $1.623 billion, while scholarships for students studying abroad amounted to $207 million. The Medical Supply Agency and the National Center for Disease Control were allocated $272 million, and remittances for other entities reached $539 million.

Additionally, the public electricity sector used $850 million, and higher education and scientific research were allocated $33 million. Credits for other entities reached $203 million.

According to the statement, commercial banks used $11.110 billion in documentary credits, $306 million in remittances, $7.562 billion for personal purposes, and $119 million for traders’ cards. Thus, the total foreign currency usage exceeded $23 billion.

Exclusive: New Shipment of Currency Arrives at the Central Bank of Libya Vaults

Written by Amira Cherni on . Posted in News. No Comments on Exclusive: New Shipment of Currency Arrives at the Central Bank of Libya Vaults

The Central Bank of Libya revealed in an exclusive statement to our source that a new shipment of currency has just arrived at the Central Bank via Mitiga International Airport. The shipment was immediately transferred to the Central Bank’s vaults in preparation for distribution to commercial bank branches in the coming days based on demand.

Additional shipments will continue to arrive as directed by the Central Bank Governor, Naji Issa, aiming to completely resolve the cash liquidity crisis before the upcoming Ramadan.

With Details: Al-Safi: “The New Leadership of the Central Bank Relies on a Strategy of Providing Market-Reassuring Information”

Written by Amira Cherni on . Posted in Post Of The Week. No Comments on With Details: Al-Safi: “The New Leadership of the Central Bank Relies on a Strategy of Providing Market-Reassuring Information”

Economic expert Mohamed Al-Safi published an article on his page, discussing the use of information as a monetary tool in Libya.

When monetary tools are mentioned, discussions often focus on traditional instruments such as interest rates or exchange rates. However, positive and disciplined communication with the market is an equally significant monetary tool.

The new leadership of the Central Bank of Libya has begun to clearly demonstrate its characteristics, effectively employing one of the strongest monetary tools at its disposal: good communication and information dissemination.

The new management relies on a strategy of delivering information that reassures the market, leveraging the principle that “capital is cowardly” to steer it away from speculative markets and reduce speculators’ impact on the Libyan economy. This strategy is not limited to information sharing but extends to restoring trust through consistent decision-making and defending those decisions in practice. The alignment between declared policies and their transparent implementation fosters confidence in the institution, signaling that the Central Bank has a clear plan and is determined to execute it.

This approach marks a departure from the previous management, which often caused market anxiety and used information negatively (e.g., raising the red flag in 2015), destabilizing the market. In contrast, the current leadership employs realistic reassurance as a tool to prevent market chaos.

Exchange Rate Messages as a Model for Monetary Communication
Messages concerning exchange rates are a prime example of using communication as a monetary tool. The Central Bank has conveyed clear signals about its intention to lower the exchange rate, reducing incentives for capital that had previously engaged in speculative dollar trading for profit. This strategy lessens artificial demand for the dollar as a speculative commodity and promotes its real use for trade and imports.

Liquidity Management and New Banknote Announcement
Regarding liquidity issues, announcing the printing of new banknotes might encourage those holding large sums outside the banking system (so-called “under the mattress” savings) to deposit these funds in banks, fearing future difficulties in using them. This measure could reintegrate part of the money circulating outside the banking system into the official economic cycle.

Challenges to Success
Despite its promising approach, there are risks that could hinder these policies, including:

  1. A decline in oil revenues might weaken the Central Bank’s ability to defend the current exchange rate unless reserves are utilized.
  2. Any disruptions in electronic payment systems or delays in printing new currency could undermine trust in the Bank’s ability to execute its strategy.

Conclusion
Relying on information as a monetary tool reflects a strategic shift in the Central Bank’s management. The aim is to build trust, reduce speculation, and steer the economy toward stability. However, achieving complete success requires addressing external challenges and enhancing coordination between monetary and fiscal policies.

Economic Expert Ibrahim Wali: The Central Bank of Libya Today

Written by Amira Cherni on . Posted in Economic articles. No Comments on Economic Expert Ibrahim Wali: The Central Bank of Libya Today

The economic expert Ibrahim Wali authored an article discussing the Central Bank of Libya, emphasizing that the institution is far more than just a governor, deputy governor, and staff. It represents a collective of minds with scientific knowledge and extensive expertise in monetary, economic, commercial, and legal matters. Operating as a structured institution, the bank possesses wide-ranging powers and independence, enabling it to fulfill its purpose in line with global standards for central banks. This equips it to monitor and adapt to developments in central banking both locally and internationally.

Wali highlighted the increasing global trend toward ensuring the independence of central banks, particularly when coupled with patriotism and competence. He underscored the importance of merit-based appointments in central banks, devoid of the scourge of nepotism, selecting individuals with comprehensive knowledge and extensive experience in banking, especially in central banking operations.

He also stressed that expertise in other economic, monetary, financial, and legal areas is essential. Globally, central bankers view managing a central bank as an art form, requiring not only knowledge but also inherent talent honed through learning and experience. This blend of talent, independence, and informed decision-making has been the cornerstone of the success of renowned central banks, whose decisions and announcements are closely monitored by millions worldwide.

Unfortunately, Wali lamented, since the Central Bank of Libya was stormed by military forces, it has become a playground for opportunists, power brokers, and fraudsters. The bank, once a pillar of the Libyan banking system, has lost its prestige and respect. This decline is not limited to the institution itself but extends to its governor, board members, and employees, who face immense pressures and threats from those who disregard banking laws and the objectives of the Central Bank.

He argued that it is time to free the Central Bank of Libya from these intrusions and government interference, while ensuring harmony and coordination among monetary, fiscal, and trade policies. He specifically criticized the “dormant Ministry of Economy” and called for monetary policies that align with broader economic goals.

Wali stressed the urgency of allowing the Central Bank to independently make decisions regarding the regulation of the banking profession, liquidity management, exchange rate monitoring, and the improvement of banking services for ordinary citizens.

Moreover, he advocated for reforming the Central Bank’s human resources systems, offering financial and non-financial incentives to attract top talent. Without such changes, Wali warned, the bank risks losing its governor, board members, employees, and the entire Libyan banking sector, potentially reverting to outdated and ineffective practices—a scenario he hoped to avoid.