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Commenting on the Central Bank Governor’s Circular to Exchange Companies… Wali: “What We Hear and See Is Not as It Seems”

Written by Amira Cherni on . Posted in Economic articles. No Comments on Commenting on the Central Bank Governor’s Circular to Exchange Companies… Wali: “What We Hear and See Is Not as It Seems”

Economist Ibrahim Wali wrote an article in which he said:

Through memos, articles, videos in newspapers, TV channels, and on social media, the Governor of the Central Bank of Libya has appeared warning and threatening exchange companies, declaring that he will not tolerate violations of legal regulations—which could even lead to the revocation of some of the 230 existing licenses. He also confirmed lowering the Libyan dinar exchange rate to 7 dinars, vowing to fight the parallel market with the force of law and security authority. He has met with the Attorney General about illegal speculation, as well as with the acting Minister of Local Government, the head of the Municipal Guard, and the Ministry of Interior, to support efforts in monitoring, prosecuting, and penalizing violators, including exchange companies, while ensuring they hold valid operating licenses. Even gold traders and their shops are under the watch of the Municipal Guard and the Ministry of Interior.

Through these measures, I believe the Governor is attempting to bring the parallel market to the Central Bank’s table, confronting them with reality by expanding licensing of exchange companies and engaging directly with them to control the parallel market.

However, these strict measures are a double-edged sword: either the expansion of exchange companies—now 230—carries significant risks without standards and controls, effectively turning them into substitutes for commercial bank branches conducting multiple banking operations; or, the Governor has a future vision where this large number will shrink by half, as weaker companies unable to comply with the Central Bank’s regulations are eliminated under heavy monitoring by the Municipal Guard, police, and regulators. The UAE offers a precedent: 140 brokerage licenses were granted within three years, but this dropped to 74 after stricter standards were enforced.

There are four categories of brokerage companies in such systems:

  • Type 1: Cash exchange (buying and selling currency only).
  • Type 2: Handling transfers.
  • Type 3: Processing salary transfers for employees.
  • Type 4 (newest): Linked to electronic payments.

Unfortunately, none of these categories exist in a structured way within Libya’s exchange companies.

So, what are the monetary, financial, and commercial arrangements to ensure the success of the Central Bank’s measures—especially with the Ministry of Finance (responsible for revenues and parallel spending) and the Ministry of Economy (responsible for prices of food, medicine, exports, and imports)? What procedures will exchange companies follow in their professional work, without a clear legal and administrative framework to define requirements and operations in line with the Central Bank’s objectives?

There will be many serious challenges, unless the Central Bank effectively controls money supply. We are talking about 153 billion Libyan dinars—the steadily growing money supply. The monetary base keeps expanding and demanding dollars, while government spending is uncontrolled under two rival administrations.

I support the Central Bank in strengthening our national currency and reducing the dollar’s value. Libyans long for the days when one dollar equaled 30 qirsh, and when the dinar had strong purchasing power backed by ample foreign currency reserves. Sadly, what we hear and see is not the reality: the Central Bank faces a shortage of foreign currency, and the state relies on oil for over 80% of its income. If oil falls below $70 per barrel, the state cannot even pay salaries.

Thus, a fluctuation of 20 qirsh in the dollar’s value depends on information available to speculators and the Central Bank’s secret strategy against them. The exchange rate is determined here—but this is not a short-term issue, it requires long-term solutions. If the Central Bank delays support to banks and exchange companies, the dinar’s value will decline, harming both the financial market and citizens. We want to strengthen the dinar under continuous monetary stability—this is what citizens want and what the Central Bank aims for.

If the Central Bank maintains and defends the official exchange rate of 5.45 LYD/USD, but then adds a 15% levy—raising the effective rate to 6.45 LYD/USD in violation of court rulings—and manages to reduce the wide gap between the official and parallel rates, then credit is due to the Central Bank, its Governor, its Board of Directors, and its staff.

May God aid the Central Bank of Libya, unite it with the Ministry of Finance and the Ministry of Economy, and protect it from obstructers—especially the two parliaments and the reckless spending of two rival governments. (One hand alone cannot clap.)

Al-Bouri: Without Controlling Public Finances, the Central Bank Has Only Two Options: Either Tap Reserves or Devalue the Currency

Written by Amira Cherni on . Posted in Reports. No Comments on Al-Bouri: Without Controlling Public Finances, the Central Bank Has Only Two Options: Either Tap Reserves or Devalue the Currency

The Italian news agency Nova reported on Thursday, citing former Chairman of Assaray Bank for Trade and Investment, Naaman Al-Bouri, that despite Libya’s vast oil resources, the country spends more foreign currency than it earns from oil sales. If the tax system is not restored, the Central Bank of Libya will be forced to devalue the Libyan dinar to address the growing foreign currency deficit.

In an exclusive interview with Nova, Al-Bouri explained that Libya’s foreign currency expenditures exceed its oil revenue. With a deficit exceeding $5 billion in the first seven months of the year, such a financial measure becomes necessary if fiscal reforms are not adopted, alongside the limited revenue and public expenditure system in Libya.

He pointed out that Libya cannot borrow from international markets and relies on oil sales for approximately 95% of its revenue. To meet the increasing expenditure requirements of the western and eastern governments, the Central Bank has only two options to maintain economic activity: either devalue the Libyan dinar or withdraw from its sovereign reserves, which total around $84 billion.

The latest Central Bank report confirms the imbalance between revenues and expenditures highlighted by Al-Bouri: in the first seven months of the year, dollar revenues from crude oil sales and royalties totaled $13.9 billion, compared with foreign currency investments and obligations of $19.1 billion. This difference—technically known as the balance of payments—amounted to a cumulative deficit of $5.2 billion by the end of July, similar to the deficit recorded in June.

Al-Bouri emphasized that the key condition to resolve Libya’s public finance problem is a political solution. The existence of two governments in Tripoli and Benghazi prevents the creation of a unified state budget. To achieve this, institutions in the west and east must first be unified, after which a single budget can be established—a situation that has persisted in Libya for years and has also hindered the Central Bank from controlling itself.

He added that the Central Bank uses two different financing mechanisms for the competing governments: the Tripoli government relies mainly on oil revenue, while the Benghazi government relies on monetary financing, i.e., issuing public debt. This dual mechanism results from massive public spending and mutual distrust, as neither administration wants to disclose to the other how resources are spent. Consequently, the Central Bank branches in Tripoli and Benghazi effectively operate as separate institutions, each serving its respective government.

Exclusive: Central Bank Circulates Guidelines to Banks on the Roles of Licensed Exchange Companies and Offices

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Our source obtained exclusively a circular from the Central Bank of Libya to banks regarding the activities conducted by licensed exchange companies and offices in foreign currency transactions.

These activities include buying and selling foreign currency with a maximum margin of 7%. Licensed exchange companies and offices are also authorized to process transactions through banks’ point-of-sale (POS) terminals—owned by Libyan banks—using cards issued by local or foreign banks.

The deducted amounts from both local and foreign cards are converted into Libyan dinars and deposited into foreign currency accounts dedicated to licensed activities. Exchange companies can also purchase foreign currency from accounts held by individuals or legal entities at banks operating in Libya and use cash against accounts of the exchange companies and offices themselves.

All operations must comply with the instructions outlined in Circular A.R.M.N No. (2025/20), ensuring that the selling price does not exceed a 7% profit margin above the Central Bank of Libya’s selling rate.

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Exclusive: Central Bank Authorizes Banks to Allow National Industrial Companies to Transfer Loan Installments from Foreign Banks or Financial Institutions

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Our source has obtained a copy of the Central Bank of Libya’s instructions to commercial banks, permitting national industrial companies operating in Libya—and meeting all legal requirements—to transfer installments of loans obtained from foreign banks or financial institutions.

This is conditional on obtaining prior approval from the Banking and Currency Supervision Department for transferring these installments and fulfilling all stipulated requirements and documentation.

Exclusive… Central Bank Circulates to Banks Allowing Foreign Currency Account Holders to Deposit up to $10,000 or Equivalent in Other Currencies

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Our source has exclusively obtained a circular from the Central Bank of Libya addressed to banks, permitting holders of foreign currency bank accounts—individuals and entities—to deposit cash into these accounts up to an amount of $10,000 (ten thousand U.S. dollars) or its equivalent in other foreign currencies.

According to the circular, if the amount to be deposited exceeds $10,000 or its equivalent in other foreign currencies, a currency disclosure form issued by Libyan border points must be provided. There is also a requirement to adhere to all due diligence procedures and ensure enhanced due diligence in accordance with anti–money laundering and counter–terrorism financing regulations.

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Exclusive: Central Bank: “The Letters of Credit Reservation System Shows Excellent Results with 2,900 Companies Registered for $2.5 Billion”

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A senior official at the Central Bank of Libya exclusively told our source: “The letters of credit reservation system has shown excellent results, enabling 2,900 companies to register for a total value of $2.5 billion. This was previously unavailable due to corruption, favoritism, and the domination of certain companies over banking transactions, which excluded some small traders and others.”

The source added: “Today, you can make reservations from your home without doors or phones being closed on you. Large approvals have been granted today, and the full reserved amount will be processed with approvals starting Sunday, according to the order of reservation.”

Exclusive: Central Bank to Sada — Faster Pace in Coming Days to Approve All Requests on the New Letters of Credit System

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The Central Bank of Libya revealed exclusively to our source that approvals for the new letters of credit system have already begun, with customers receiving messages today regarding the approvals that were executed.

According to the Central Bank, the pace will be faster in the coming days to approve everything loaded onto the system and referred to banks in order of priority.

Exclusive: Central Bank Expects Dollar to Drop to 7.5 Next Week After Injecting $1.5 Billion Through the Forex System

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A senior official at the Central Bank of Libya stated exclusively to our source:
“We expect the dollar to fall below 7.50 LYD next week following the injection of $1.5 billion through the foreign exchange system.”

According to the source, this move will support the upcoming meeting with exchange companies and offices next Sunday, during which the Central Bank will present its vision to support this sector.

Exclusive – Central Bank to Sada: If This Plan Is Implemented, We Will Be Able to Eliminate the Foreign Exchange Tax… Learn More

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The Central Bank of Libya revealed in an exclusive statement to our source that it is currently studying a mechanism for the operation of exchange companies and offices, by providing them with foreign currency both in cash and through direct transfers.

The Central Bank stated that once this package succeeds — including the withdrawal of the 20-dinar banknote, the launch of exchange offices, and the regulation and control of public spending — the exchange rate of the dollar will fall below 7 dinars. At that point, the Bank will be able to eliminate the 15% foreign exchange tax.

Exclusive: The Central Bank Allocates 1.5 Billion Dollars to Settle Credits and Personal Purposes Ahead of the System Launch Next Sunday

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The Central Bank of Libya revealed in an exclusive statement to our source that it has allocated an amount of 1.5 billion dollars to settle the value of approvals for credits and to sell them to banks for a value of one billion dollars next Sunday.

This is in preparation for the start of operations of the system designated for credits, with a value of 500 million dollars allocated for personal purposes.

Exclusive: Central Bank — We Can Contain the Parallel Market Below 7 Dinars per Dollar After Resuming Exchange Offices and Company Operations

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Our senior source at the Central Bank of Libya revealed exclusively: “We have the ability to bring the parallel market under control, keeping the dollar below 7 dinars, following the resumption of licensed exchange offices and companies. These are not mere signals, but part of a well-organized plan being developed for this purpose.“

The source added: “Market regulation is not difficult. We will support the operations of exchange offices to help control the market at a level set by the Central Bank. The profit margin set for companies and offices — at 7% over the official rate — provides attractive earnings for those committed to operating within a legal and regulated framework.

In the initial phase, the sale price from exchange offices would be around 6.80 dinars per dollar, generating profits of approximately 740,000 dinars per every one million dollars sold — a compelling return that encourages legal and organized operations.“

He further stated: “We do not want to disclose our full plan until after the upcoming meeting with exchange offices and companies. There are measures we’re withholding for now as they serve as defense lines for exchange rate stability.“

Exclusive: Central Bank Explains Rise in Dollar Rate, Affirms Full Coverage of Needs and Plan to Stabilize Market Starting October

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The Central Bank of Libya confirmed exclusively to our source that it is closely monitoring market conditions, noting that several factors have contributed to the rise in foreign exchange rates. Some are temporary, such as speculation, money laundering linked to the 20-dinar banknote, and exploitation of the grace period before its withdrawal from circulation. International procedures to combat money laundering and the monitoring of international card transactions have also raised fears of reduced supply in the market.

According to the Central Bank, continued high levels of public spending and a growing deficit have increased uncertainty in the market, leading traders to expect further rises in exchange rates. Despite this, the Bank asserts it is meeting all demands and needs.

It added that the Central Bank’s plan to contain the market will begin on October 1, after the end of speculation over the 20-dinar note. The market will be regulated, and foreign currency sales to exchange companies will resume following mechanisms agreed upon during the August 3 meeting. The Bank aims to eliminate the black market and corruption before the end of the year.

It further stated: “We expect to sell $3 million monthly to exchange companies, and $1 million monthly to offices, transferred to their accounts with the Bank. We will also allow currency sales through fast transfers, card top-ups, and cash transactions within a defined margin, with valuation based on market supply and demand.”

Exclusive: Central Bank Governor Instructs GNU Ministries to Enforce E-Payment for Services Starting August

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Our source has exclusively obtained official correspondence from the Governor of the Central Bank of Libya, in which he directed the Ministries of Health, Education, Higher Education, and Transportation in the Government of National Unity to instruct all affiliated and supervised institutions to mandate the use of electronic payment methods approved by the Central Bank of Libya for all service payments related to students, air travel, universities, institutes, and hospitals.

The directive includes the requirement to provide Point-of-Sale (POS) devices at their premises, which will both facilitate transactions for citizens and help address cash liquidity issues.

Implementation is to begin as of August 1.

With Foreign Currency Deficit on the Rise… Central Bank Discloses Revenue and Spending Details for the First Six Months of 2025

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The Central Bank of Libya has revealed revenues and expenditures from January 1 to June 30, reporting total revenues of 61.3 billion LYD, while expenditures amounted to 57 billion LYD.

According to the Central Bank’s statement, oil sales revenues reached 51.5 billion LYD, and oil royalty revenues stood at 9.3 billion LYD. Tax revenues amounted to 304.6 million LYD, customs revenues to 86.8 million LYD, and telecommunication revenues to 45.8 million LYD. The statement also recorded other revenues totaling 501 million LYD. On the expenditure side, Chapter I (salaries) consumed 36.5 billion LYD, Chapter II (operational expenses) reached 2.5 billion LYD, and Chapter IV (subsidies) accounted for 18 billion LYD — all during the period from the beginning of January to the end of June 2025.

The Central Bank further revealed that the foreign currency deficit had reached $5 billion, while revenues from the imposed fee on foreign currency sales amounted to 10.3 billion LYD.

The report included a total of $16.6 billion in foreign currency usage, which consisted of: $7.4 billion in letters of credit, $276 million in wire transfers, $5.7 billion for personal purposes, $43 million through small business cards, $165.3 million in salaries for workers abroad, $46.4 million in scholarships for students studying abroad, $44.6 million for overseas medical treatment, $344 million to the National Oil Corporation, $1.2 billion for fuel imports, $204 million for the Medical Supply Authority, $371 million for the General Electricity Company, $128.5 million for the Housing Projects Implementation Authority, and $588.2 million in transfers and credits for other entities.

The report also stated that the number of individual subscribers using the LYPAY and ONEPAY instant transfer services during the period reached 5.1 million, while commercial users totaled 115,700. The number of transactions made via the instant “merchant transfer” service was 3.3 million, with a total transaction value of 22.1 billion LYD.

According to the Central Bank, spending by the Prime Minister’s Office of the Government of National Unity reached 190.3 million LYD, while spending by entities affiliated with the GNU exceeded 1 billion LYD. The Presidential Council’s spending surpassed 36 million LYD, and its affiliated entities spent 330 million LYD. Meanwhile, the House of Representatives’ expenditures totaled 42.72 million LYD, and those of its affiliated bodies exceeded 532 million LYD, all within the period from January 1 to June 30.

Exclusive: Central Bank Governor to Parliament’s Budget Committee Rapporteur: We Cannot Comment on the 2025 Budget Draft… and Here’s Why

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Our source has exclusively obtained a letter from the Governor of the Central Bank of Libya, Naji Issa, addressed to the Rapporteur of the Planning and General Budget Committee in the House of Representatives. In it, the Governor asserted that the Central Bank is unable to provide comments on the 2025 budget draft, stressing the need to reconsider the proposal and consult with the Central Bank and other relevant state institutions before its approval.

The Governor explained that established practices — in accordance with laws such as the Banking Law (Article 5, paragraphs 3, 4, 5, and 6) — require consultation with the Central Bank during the preparation of the general budget. Sending the draft budget law in its current form and requesting feedback within three days does not fulfill the goals or principles of meaningful consultation with the Central Bank, nor does it result in a budget that the Central Bank can implement.

He further noted that effective and practical consultation must address the fundamental elements of the general budget — most importantly, the need to adopt a unified budget as a prerequisite for controlling and consolidating public expenditures. Advance consultation is also necessary, he added, given that the country is already in the second half of the fiscal year. This requires taking into account the revenues collected and expenditures made during the first half of the year, as well as the actual revenue and spending estimates — a crucial aspect that was neglected in the submitted draft.

The Governor also revealed that he has begun directly addressing the Speaker of the House of Representatives to clarify the reasons behind the Central Bank’s inability to comment on the proposed budget.

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