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.
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.
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.
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.
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.
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.
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:
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.
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.
The Central Bank of Libya exclusively revealed to our source that a flight has just departed from Tripoli to Benghazi carrying a cash shipment valued at 50 million dinars. Of this amount, 20 million has been allocated to support the treasuries of Sahara Bank branches in the city, and 30 million is designated for North Africa Bank branches.
This initiative was undertaken under the directives of the Governor of the Central Bank of Libya, Nagy Issa, and his deputy.
Our source has obtained a circular issued by the Central Bank of Libya to commercial banks regarding regulations for setting purchase limits based on individual salaries. The goal is to facilitate salary disbursement before funds are deposited into banks and to promote electronic payments.
The regulations stipulate that banks must establish purchase limits through electronic payment services they offer, such as electronic cards or mobile applications.
The limit granted to customers is considered a form of Qard Hasan (interest-free loan) and is subject to all its rules, terms, and Sharia-compliant regulations. Key conditions include:
The service is to be offered upon customer request through bank-specific mobile applications, SMS services, or signed forms that outline all product terms and conditions, approved by the bank’s Sharia supervisory board.
Each bank is required to establish policies and regulations for the service, including identifying target beneficiaries, service terms, and the procedures needed to safeguard the rights of both the bank and its customers. Banks may impose conditions for eligibility, restrict usage cases, set specific loan ceilings, or link the limit to the salary value, provided these conditions do not conflict with the bank’s financial policies or legal regulations.
The service is available to bank customers with active current accounts who have been receiving regular salary deposits for at least six months.
The granted limit must not exceed 60% of the net salary after deducting any installments or obligations. The used amount is automatically deducted from the limit when the salary is deposited, and the limit is renewed automatically unless either party decides otherwise.
The bank’s board of directors and Sharia supervisory board must approve the policies, product guidelines, terms, and models, ensuring compliance with regulations issued by the Central Bank of Libya.
Banks are also authorized to take all necessary technical and legal measures to recover their dues in cases where customers fail to prove insolvency. Additionally, banks may refuse to provide a Qard Hasan to clients with a history of defaults or other issues, as determined by approved policies and regulations to mitigate risks.
In light of this, the Central Bank has urged commercial banks to launch the product and prepare their systems to enable the use of these limits for electronic payment transactions in compliance with the aforementioned terms and regulations.
The Central Bank of Libya exclusively revealed to our source that a plane carrying a cash shipment of 10 million dinars took off moments ago from Tripoli Airport heading to Ubari in southern Libya.
Of this total, 4 million dinars are allocated to the National Commercial Bank, 3 million dinars to the safes of the North Africa Bank branches, and 3 million dinars to the Republic Bank.
The Central Bank of Libya exclusively revealed to our source that a plane carrying a cash shipment of 10 million dinars took off moments ago from Tripoli Airport heading to Ghat.
Of the total amount, 6 million dinars are allocated to the National Commercial Bank, and 4 million dinars to the safes of the North Africa Bank branches. The Central Bank will continue to distribute cash in the coming days and weeks according to a well-organized plan with scheduled flights.
This comes after assessing the cash needs of customers at commercial bank branches. Following the directives of Governor Nagy Issa, the Central Bank of Libya has started distributing cash shipments to replenish bank branches across Libya.
Economic advisor Wahid Al-Jabo, in an exclusive statement to Sada Economic, said: “If the Ministry of Finance has prepared and directed the salaries on time with lists of state employees’ names, the Central Bank of Libya must transfer the salaries to the beneficiaries’ current bank accounts.”
He added, “However, if the allocations for Chapter One [salaries] have been exhausted, the Ministry of Finance should seek permission from the Central Bank to cover the salaries.”
Al-Jabo also noted that the halting of oil production and export in recent months might have had a negative impact on the Central Bank’s financial inflows, leading to salary delays. He emphasized the importance of clarifying the reasons for the salary delays between the Ministry of Finance and the Central Bank of Libya.
The Central Bank of Libya exclusively informed Sada Economic about recent developments regarding salary disbursements.
It revealed that no revenues have been transferred to the bank for months as of today, November 25, to cover salaries. As evidence, the Central Bank financed October’s salaries through a loan from its own resources.
A source at the Central Bank of Libya exclusively revealed to Sada Economic that the bank continues its efforts to support the value of the Libyan dinar.
The source added that all possibilities are on the table, including a further reduction in the foreign exchange tax or its complete elimination by the end of the year.
