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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 Subsidized goods and services make up about one-third of the Consumer Price Index (CPI), which was based on an outdated consumption basket covering only Tripoli.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.

Exclusive: Among Them Adjusting the Required Liquidity Ratio Against Depository Liabilities… Central Bank Governor Plans to Launch Reform Package

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The Governor of the Central Bank of Libya intends to launch a series of reforms that began unfolding two days ago. These reforms aim to strengthen the value of the Libyan dinar, preserve reserves, ensure financial sustainability, and secure the desired economic stability.

Among the measures is the issuance of new instructions regarding the adjustment of the required liquidity ratio to be maintained against depository liabilities.

Exclusive: Central Bank Governor to Present Reform Plan That Could Eliminate Foreign Currency Sales Tax

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The Central Bank of Libya told our source exclusively: “The Governor of the Central Bank of Libya will present a memorandum that includes a reform plan for the economic situation aimed at increasing the value of the Libyan dinar.”

The Central Bank stated: “If the reforms are approved and implemented within a maximum period of two months, the 15% tax imposed on foreign currency sales will be lifted, and the exchange rate at the bank will be fixed at 5.56 only, in accordance with the decision of the Bank’s Board of Directors.”

Exclusive: Central Bank: “There Is Still a Chance to Improve the Dinar’s Value by Removing the Tax, and We Will Present a Swift Reform Plan”

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The Central Bank of Libya told our source in an exclusive statement: “We have taken measures to correct the exchange rate, setting it at 5.56 dinars per dollar, while maintaining the 15% tax.”

The bank added: “There is still an opportunity to improve the value of the dinar by removing the tax—if reform measures and spending unification are implemented. The Central Bank will present a rapid reform plan, and we will not allow speculators to continue operating in the market.”

The statement continued: “We hope all parties will cooperate quickly. The opportunity for reform is available, and improving the situation is possible despite local and international challenges.”

Exclusive: Central Bank Approves New Board of Directors for Assaray Bank

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Our source has exclusively obtained a letter confirming that the Central Bank of Libya has approved the appointment of new members to the Board of Directors of Assaray Bank.

The newly appointed members are:

  • Basem Ali Qasim Tantoush
  • Ahmed Ali Ahmed Atiga
  • Mohamed Abu Bakr Al-Safi Al-Menfi
  • Ehab Lotfi Ahmed Al-Shahawi
  • Mohamed Omran Mohamed Abu Kra’a
  • Monjia Al-Taher Omar Nashnoush
  • Refqa Abdel Majid Abdul Qader Al-Kout
  • Zaid Al-Freij Mohamed Al-Bassiouni
  • Rakan Jalal Ibrahim Hosni Bey
  • Abu Bakr Abu Al-Eid Abu Al-Qasim Abu Al-Eid
  • Osama Wahbi Ahmed Al-Bouri

Exclusive: Central Bank Issues Circular Amending the Mandatory Cash Reserve Ratio Against Deposit Liabilities

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Our source has exclusively obtained circulars from the Central Bank of Libya addressed to commercial banks regarding the amendment of the mandatory cash reserve ratio against deposit liabilities.

The Central Bank revealed that the Board of Directors has issued Decision No. (20) of 2025 concerning the amendment of the mandatory cash reserve ratio on deposit liabilities for commercial banks subject to this requirement. Article One of the decision states the following:

The mandatory cash reserve ratio that commercial banks must maintain with the Central Bank of Libya against their deposit liabilities—pursuant to the provisions of Articles (57), (58), and (59) of the Banking Law—is to be amended to 30% (thirty percent) of the total deposit liabilities subject to this ratio.

Exclusive: Including a Maximum 7% Expansion in the Financing and Investment Portfolio – Central Bank Issues Key Instructions to Banks

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Our source has exclusively obtained circulars from the Central Bank of Libya addressed to banks, aimed at ensuring the stability and strengthening the resilience of the banking sector, particularly in terms of influencing the volume, type, and duration of credit and financing, in a way that meets the actual needs of economic activity in production and services.

The instructions state that the maximum allowable expansion in the size of the credit portfolio – the financing and investment portfolio – for the financial year 2025 shall not exceed 7% of the bank’s existing portfolio balance. Furthermore, banks must adhere to the instructions when granting credit and financing, which must be based on a thorough study of the client and the associated risks, and must include all the requirements stipulated by the Central Bank of Libya.

It is also necessary to review, update, and develop credit/financing and investment policies, as well as related risk management policies, to keep pace with market changes and economic conditions. These policies must at least meet the minimum requirements set by the Central Bank of Libya.

Banks must also manage the credit/financing and investment portfolio in a way that reduces the ratio of non-performing loans and limits individual and sectoral concentration. The portfolio should be diversified by setting limits to address concentration risks across various levels and activities.

Periodic review and updating of standards and conditions related to granting credit and financing must be conducted whenever necessary, in order to avoid any future risks to the banks.

In addition, efforts must be made to train and qualify staff in managing credit/financing and investment portfolios, and in applying best practices in risk management, by enrolling them in certified and specialized training programs to enhance their competencies.

Al-Tarhouni: “In Light of the Central Bank’s Decisions… Where Is the Standard of Living in Libya Headed?”

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Economic expert Dr. Abdullah Wanis Al-Tarhouni wrote:

Many have voiced their opinions following the release of a circular or statement by the Central Bank of Libya regarding revenues and expenditures for January and February 2025. Frankly, the statement is incomplete and its figures inaccurate. Its main aim appears to be preparing Libyan public opinion for the upcoming scenario—something that became evident with the first working day after the Eid al-Fitr holiday.

Fundamentally, the Central Bank is responsible for monetary policy, which must be aligned with other economic policies. Therefore, publishing expenditure data is primarily the role of the Ministry of Finance, as it is responsible for fiscal policy, not the Central Bank. Moreover, anyone claiming that Libya’s crisis is purely economic either misunderstands the situation or is focusing on details while missing the core issue. Libya’s crisis is a deeply political one, and the economic imbalances began in 2014—when the political turmoil started, followed by oil shutdowns, wars, and internal conflicts. Therefore, returning to the root of the problem is the foundation of any solution.

Today, as Libyans, we stand at a crossroads. With Trump rising to power, crude oil prices dropped, forcing Libya to diversify its income sources to fill the financing gap and catch up with Gulf countries that are already far ahead. I believe it is time to listen to experts and wise voices, and to learn from nations that have endured what we have.

On the technical side, some believe that Law No. 1 of 2013, which prohibits usury in Libya, has deprived the Central Bank of one of its key tools: interest rates. This has made the exchange rate the only mechanism available since 2013. Personally, I don’t fully agree with this view. The country needs to activate the stock market, regulate government spending through a proper budget law, control foreign labor, and—most importantly—revive the role of regulatory bodies and fight corruption relentlessly.

It goes without saying that spending without a budget law, the dysfunction of regulatory bodies, the continuation of crude-for-refined oil barter arrangements, and the ongoing shutdown of local refineries—along with printing over 100 billion dinars while keeping old currency editions in circulation—will inevitably lead us to bankruptcy sooner or later. Solving these four major issues could stabilize the economy, but it won’t fully recover without addressing other influencing factors.

Currently, trade, fiscal, and monetary policies operate in isolation. Meanwhile, the Central Bank’s Board of Directors issued Resolution No. 18 of 2025, devaluing the national currency to fill the financing gap and avoid drawing from reserves. However, this decision will only increase poverty due to inflation and widen the gap between the wealthy and the underprivileged. Reports suggest the decision was made with half the board members agreeing—not the majority—thus violating the Libyan Banking Law. The Central Bank would be better off halting loans to the government (except for Chapter One of the budget), and even that should only be disbursed through the “Aysar” system controlled by the Central Bank.

Without repeating what has already been published, several Libyan experts—including Dr. Mohamed Abu Snena, Dr. Mohamed Mohamed Al-Shahaty, and Dr. Omran Al-Shaibi—have proposed mechanisms to address current distortions in the Libyan economy. Central to these proposals is the legal control of public spending through a budget law, the closure of the majority of Libya’s embassies, consulates, and missions abroad (which are double the number of U.S. missions), tightening controls over Letters of Credit and currency transfers, withdrawing and burning 50-dinar notes as part of a plan to remove at least 50 billion dinars from the market, raising customs duties on luxury and non-essential goods, restarting local refineries, and—simultaneously—restructuring state institutions through proper integration and elimination based on valid criteria, while also correcting the situation of foreign labor.

In any case, whether we like it or not, returning to a real economy based on agriculture and industry is inevitable. We must wake up from the illusion brought about by the “Dutch disease” that has plagued Libya as it did other nations before us. In the coming years, we must secure our food from our vast lands, promote small and medium industries, expand industries related to crude oil, and support innovation and the knowledge economy.

In conclusion, I believe Libya’s crisis is political, not economic. The measures listed in this article are merely responses to a decades-old issue. We need years of thoughtful planning to restore Libya’s dignity and allow its people to live with pride on their own land.

Exclusive: Ruvinetti Reveals the Consequences of the Exchange Rate Change and Its Impact on Libyan Families

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Italian strategic expert Daniele Ruvinetti told our source on Tuesday that devaluing the Libyan dinar will increase the cost of imports, which could significantly impact Libyan households, given the country’s heavy reliance on imported goods.

Ruvinetti confirmed to Sada that inflation may rise, which is an increasing concern as it reduces the purchasing power of citizens who have been suffering from economic instability since 2011. The timing of the decision raises questions: Why now?

He continued, “The Libyan economy has been fragile for years, burdened by political divisions and public debt—which reports indicate has reached 330 billion dinars. This move could be a sign of deeper financial challenges or a response to dwindling reserves, despite the Central Bank’s insistence that its goal is to maintain stability.”

Ruvinetti pointed out that ultimately, this appears to be a temporary fix for Libya’s structural economic problems. The country’s overreliance on oil along with its fragmented political landscape limits the effectiveness of monetary policy. Without broader reforms—such as unifying the split branches of the Central Bank or tackling corruption—this currency devaluation could simply delay addressing deeper issues, he said.

Exclusive – Commenting on the Central Bank’s Exchange Rate Adjustment Decision: Ghaith: The Justifications Presented Are Not from the Central Bank but from the Government, and What’s Happening Is Speculation and Brokerage in Dollars

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Former member of the Board of Directors at the Central Bank of Libya, Mrajaa Ghaith, stated exclusively to our source regarding the Central Bank’s decision to adjust the exchange rate:

“I believe this decision is hasty and came at the wrong time. Why adjust the exchange rate right after the Central Bank reduced the foreign exchange tax?”

He continued: “Why hasn’t the Central Bank published Resolution No. 18 regarding the exchange rate adjustment? What it did publish on its official page is merely the updated official exchange rate and the new buy/sell prices. So why not publish the decision, especially since it’s not classified?”

He added: “Certainly, the citizen is the one most affected in all cases — we said this when the tax was imposed, and we say it again with the exchange rate. We import 100% of what we need. On top of that, during this time when the world is facing a crisis and prices could rise or there could be an economic recession — you go and raise prices even more?”

Ghaith further stated: “The justifications mentioned are not those of the Central Bank of Libya; these are government justifications. The government has a deficit — let it figure out how to cover it. It’s not the Central Bank’s job to solve the government’s problems.”

According to Ghaith, since currency sales are under the authority of the Central Bank, it can impose tighter controls and limit wasteful use.

“But saying that nearly 2 billion is for personal use — this is all speculation and dollar brokerage.”

Ghaith concluded: “I advise the Central Bank to float the Libyan dinar and spare us. As long as it’s going to follow the black market, every time the rate goes up, the official rate goes up with it! Float the dinar — and may it reach 20 — and let them take responsibility.”

Exclusive: Zarmouh: A Series of Contradictions and Disturbances in the Decisions of the Central Bank of Libya

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Economics professor at the Libyan Academy, Omar Zarmouh, commented exclusively to our source on the Central Bank of Libya’s decision regarding the exchange rate adjustment, saying:

What is surprising in the decisions issued by the Central Bank of Libya on Sunday, April 6, is that they carry within them a series of contradictions and disturbances that such a prestigious bank should not have fallen into, being the most important economic institution in the country. These include the following:

  1. When the new administration took over its duties, it pledged to strengthen the value of the dinar. What we are witnessing today is the opposite.
  2. The administration insisted on continuing to impose the tax, which was initially 27%, then reduced to 20%, and again to 15%, defying court rulings that declared it invalid. There is no economic or legal justification for continuing with it.
  3. As part of the insistence on imposing the tax, recent rumors have emerged suggesting that the tax will be increased to 33%. Although I don’t believe rumors, by testing this one, it turns out that reducing the value of the Libyan dinar by approximately 13% while keeping the 15% tax is equivalent to imposing a 33% tax. This means that the bank’s administration may have actually intended to raise the tax to 33% but failed to do so, substituting it with a devaluation of the dinar. This indicates the administration is inconsistent in its decisions and lacks a coherent economic policy. This inconsistency is demonstrated by the shifting rates (27%, then 20%, then 15%, then effectively 33%), especially in light of the previous analysis of the 33%.
  4. In October 2024, the administration decided to increase the personal transfer allowance from $4,000 to $8,000, only to reduce it now to $2,000, along with a review of foreign currency transfer regulations. This contradicts previous statements from the administration claiming the bank is ready to meet all foreign currency demand. Doesn’t this shake public confidence?
  5. The issue is that such decisions appear to be based on nothing but emotion or trial-and-error (“hit or miss”) and are not grounded in any solid economic principles or theories.

He concluded:

Finally, I urge the Bank’s administration to put the ‘goal of monetary stability’ at the forefront of its objectives, to rely on science, and to steer clear of experimentation—whose failed outcomes are well-known in advance to economists.