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Central Bank Statement Reveals Increase in Foreign Currency Usage in 2024 Compared to Previous Years, Reaching 27 Billion Dollars

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The Central Bank of Libya revealed an increase in the use of foreign currency during 2024 compared to previous years, reaching 27 billion dollars.

Salaries for employees abroad amounted to approximately 302 million dollars, student grants for those studying abroad were 207 million dollars, treatment abroad costs were 101 million dollars, fuel subsidies were zero, the National Oil Corporation received 1.648 billion dollars, remittances to other entities were 600 million dollars, and the Medical Supply Authority and the National Center for Disease Control received 288 million dollars.

The General Electricity Company received 896 million dollars, higher education and scientific research received 38 million dollars, and credits for other entities amounted to 239 million dollars.

Additionally, documentary credits reached 12.950 billion dollars, remittances were 352 million dollars, personal purposes were 9.257 billion dollars, and merchant cards totaled 152 million dollars.

Exclusive: Abu Bakr Abu Al-Qasim: “The Central Bank and the Battle Against Market Speculators”

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The Head of the Accounting Department at the Libyan Academy for Graduate Studies, Abu Bakr Abu Al-Qasim, exclusively told our source: “Foreign exchange sales for personal purpose cards reached $472 million during the first 12 days of January. The Central Bank remains steadfast in its policy of meeting all foreign currency demands without interruption or restrictions, despite rumors propagated by speculators aiming to create chaos in the market with claims of halting the foreign currency sales system.”

He added, “Despite inflated and uncontrolled government spending, coupled with declining oil revenue flows, the Central Bank continues to lead the battle against market speculators alone through a well-thought-out policy, even as governments remain idle.”

He concluded by saying, “It is imperative for everyone to stand by the Central Bank in its battle against speculators and exert pressure on governments in both the East and West to rationalize spending and deposit oil revenues fully into the general revenue account at the Central Bank without deductions. This is the only solution to maintaining the strength of the dinar and potentially improving its value in the near future.”

Exclusive: Al-Zantouti: “The Real Issue is the Inability to Determine a Fair Exchange Rate for the Dinar”

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Financial expert Khaled Al-Zantouti told our source exclusively, “For years, we have failed to establish a fair exchange rate for the dinar, one that is determined using standard economic models based on recognized macro and microeconomic variables.”

Al-Zantouti added, “Over the years, the exchange rate for our dinar has been determined by a group of speculators in the Souq Al-Mushir, driven by their interests and benefits. These individuals (not to generalize) manipulate the supply of dollars to control the rate. This occurs amid the absence of effective monetary policies from the Central Bank of Libya, which has remained a passive observer without monetary policy tools or authority over the reckless spending of competing governments. These governments, in some cases, collaborate with those speculators in a covert agreement to undermine the dinar’s strength.”

He continued, “Amid this shameful and consumption-driven competition and the collusion of crisis traders, the Central Bank remains paralyzed, unable to address the dinar’s plight. This paralysis stems from the lack of integration between monetary, fiscal, and trade policies, not to mention the uncertainty around how the exchange rate is determined—whether it’s fixed, flexible, or subject to partial or full floating.”

“These cumulative factors make it extremely difficult to estimate the exchange rate for 2025 scientifically or objectively. Unfortunately, indicators suggest a continuation of the confusion and speculation that marked previous years.”

Al-Zantouti also noted, “It is evident that the Central Bank, under its new administration, is attempting to establish a foundation for its monetary policy and regulate the currency exchange market. While this effort is commendable, it will likely take time. Ultimately, the Souq Al-Mushir will remain the decisive factor in determining the exchange rate.”

He highlighted the Central Bank’s ability to defend the current exchange rate (with the 15% tax) by ensuring dollar supply, combating inflation, maintaining foreign currency reserves, and potentially using these reserves if oil revenues decline. He remarked, “If the Central Bank manages to maintain the current rate between 6.10 and 6.40, under the present circumstances, it would be a significant achievement.”

Al-Zantouti concluded, “Given the prevailing conditions of unchecked government spending, political instability, and uncertainty around oil prices and production, the Central Bank cannot fundamentally address the exchange rate issue or set a fair and sustainable rate for the long term. However, if it succeeds in maintaining the range of 6.10–6.30 this year, it would undoubtedly be a positive accomplishment. We hope for this outcome.”

Exclusive: Saber Al-Wahsh Questions Central Bank’s Ability to Sustain Current Exchange Rate Amid Declining Foreign Currency Revenues

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Economic expert Saber Al-Wahsh exclusively told our source that the exchange rate is a product of interaction rather than a decision.

He explained: “Although adjusting the exchange rate is issued by the Central Bank, its execution relies on the government and the National Oil Corporation. The Central Bank’s role is limited to addressing emergency circumstances using available reserves. Over the past year, the Central Bank utilized $8 billion in reserves to maintain the current exchange rate.”

He added: “But how long can the Central Bank defend this rate amidst clear declines in foreign currency revenues and expanded deficit spending? The answer lies with the National Oil Corporation through the revenues it generates and with the governments through their expenditures. Essentially, the Corporation and the governments are the ones determining the currency exchange rate.”

Al-Wahsh further stated: “If the issues related to barter trade are resolved, fuel imports are organized, and spending is rationalized, we may witness some stability in the exchange rate. However, if the current situation persists, an exchange rate adjustment will not be far off, which is something we hope to avoid.”

Exclusive: Al-Twibi Files Complaint Against Parliament Speaker and Central Bank Governor Over Failure to Implement Tax Cancellation Rulings

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Lawyer Thuraya Al-Twibi revealed to our source that she has filed a complaint against the Governor of the Central Bank of Libya and the Speaker of the House of Representatives for their refusal to implement two rulings. These rulings mandate the suspension of the decision and the cancellation of the imposition of the foreign currency tax, according to her statement.

She stated: “Article 234 stipulates the dismissal and imprisonment of any employee who refuses to execute court rulings. The crime defined under Article 234 of the Penal Code is evident, and the situation constitutes a clear violation, which does not require immunity to be lifted, if immunity exists.”

She added: “We call on the Attorney General to swiftly take legal action, as the crime under Article 234 of the Penal Code continues despite the issuance of the rulings. This is to leverage the clear violation and set an example for officials to respect and execute court decisions.”

Exclusive: With the Continuation of the Imposed Tax, the Central Bank Issues Regulations for Resuming Foreign Exchange Sales Using the Same Previous Mechanism

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Our source has obtained a correspondence from the Director of the Banking Supervision and Control Department at the Central Bank of Libya to the general managers of banks. The correspondence concerns the addition and amendment of certain regulations governing foreign exchange transactions as outlined in the referenced circular. These regulations address the purchase of foreign exchange for various purposes and the opening of letters of credit. Payment for documents exchanged with the correspondent bank is to be made within 15 days of receiving the documents. This condition must be included in the telegram initiating the letter of credit.

Additionally, a certificate of goods export from the country of the beneficiary must be included as part of the exchanged documents for letters of credit. This applies specifically to land-shipped goods of Tunisian origin through Ras Ajdir (customs declaration document), Algerian-origin goods through the Dehiba border crossing, and Egyptian-origin goods through the Emsaad–Saloum crossing (standardized customs declaration form). This condition is also to be included in the telegram initiating the letter of credit.

Moreover, regulations concerning electronic cards for companies, small traders, and artisans stipulate a maximum annual loading limit of $500,000 or its equivalent in other foreign currencies. This amount is to be loaded in installments, with no single installment exceeding $100,000. Subsequent installments may only be loaded after suppliers provide customs declarations verifying the import of the required goods and equipment, along with evidence of service completion by the entities benefiting from the amounts loaded onto the issued card. Compliance with any instructions from the Central Bank or other relevant authorities regarding suspended banking transactions for specific entities must also be ensured.

For direct external transfers for industrial companies, the maximum amount is set at 4% of the value of the letters of credit executed by the company during the previous year at the Central Bank of Libya, up to a limit of $2 million. These transfers must be made in installments and require prior approval from the Banking Supervision and Control Department.

The circular emphasized the implementation of the aforementioned regulations while maintaining adherence to previously issued controls in this regard.

Furthermore, the Central Bank clarified the continuation of the decision by the Speaker of the Libyan House of Representatives, No. 86 of 2024, issued on November 20, 2024, which imposes a levy on the official exchange rate until contrary instructions are issued by the Central Bank.

Exclusive: Central Bank Directs Banks to Open the Foreign Exchange System on January 5 – Here’s What Was Requested

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Our source has exclusively obtained a circular from the Central Bank of Libya addressed to commercial banks, instructing them to begin accepting foreign exchange coverage requests through its system starting January 5 for various purposes.

The directive emphasized the need for banks to prepare their systems and get ready to accept requests from clients, including individuals, companies, and entities, for all purposes.

Exclusive: Banking Source Reveals the Opening of the Foreign Exchange System on January 1 for All Purposes

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Our banking source confirmed that the foreign exchange system will be opened on January 1 for all purposes.

The Central Bank’s administration is reportedly ready to begin operations normally, according to the source.

Al-Shaeibi Explains the Importance and Implications of the Federal Reserve’s Alert to the Central Bank Regarding Dollar-Denominated Transactions

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Banking expert Omran Al-Shaeibi commented on the letter sent by the Central Bank of Libya to the Audit Bureau in response to the alert issued by the U.S. Federal Reserve, which called for subjecting its dollar-denominated transactions to review and auditing. He described this alert as a significant indicator of the nature of the relationship between the Libyan banking sector and international financial institutions. Al-Shaibi stressed the need for serious action, as this measure falls under the “de-risking” policy, whereby financial institutions end or restrict business relationships with certain clients or client groups to avoid risks, instead of managing them in line with the Financial Action Task Force (FATF)’s risk-based approach.

Al-Shaeibi explained the importance and implications of this measure as follows:

  1. Loss of Institutional Trust: This measure reflects deep concerns from the U.S. Federal Reserve about the Central Bank of Libya’s ability to manage its financial operations according to international standards. This impacts the bank’s reputation and reduces international dealings.
  2. Complicated Financial Operations: This involves subjecting international financial transactions to meticulous reviews or involving a third party in auditing processes, as indicated in the alert. Such actions could disrupt vital financial operations, such as collecting oil revenues or facilitating essential imports.
  3. Direct Economic Repercussions: Restrictions on dollar-denominated transactions may delay the country’s ability to meet external obligations, negatively affecting national economic stability and hindering the state’s ability to provide basic goods or maintain monetary stability.

He added that the implementation of the “de-risking” policy by international financial institutions, as per the FATF, is not solely tied to risks of money laundering and terrorism financing. It also reflects a comprehensive assessment of the institution’s adherence to the 40 international standards set by the FATF. This approach is based on internal risk assessments without requiring formal justification.

Al-Shaeibi emphasized the need for the Central Bank to enhance its procedures and demonstrate its ability to comply with international standards to restore correspondent institutions’ trust. This includes:

  • Preventing delays in international financial transactions.
  • Avoiding disruptions in financial flows with the global market.
  • Strengthening measures against money laundering and terrorism financing.
  • Developing a robust “Know Your Customer” system.
  • Increasing transparency in managing financial operations.
  • Engaging reputable third-party financial institutions to manage risks.
  • Seeking advisory support from international financial institutions to enhance compliance standards.
  • Working on a long-term strategy for sustained improvements.

He concluded by stating: “The recent uncalculated breach of the Central Bank has led international institutions to take stringent measures until trust in Libya’s financial institutions is restored. However, we trust the new board of directors and technical teams at the Central Bank to overcome this obstacle successfully.”

Al-Haddad: These Are the Reasons Behind the U.S. Federal Reserve’s Suspension of Dealings with the Central Bank of Libya

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Banking expert Ibrahim Al-Haddad stated in a post on his official page that the Central Bank of Libya has lost its status and credibility, as he described it. He attributed the U.S. Federal Reserve’s suspension of dealings with the Central Bank of Libya until an international auditing firm is assigned to review the bank to a complete lack of transparency and disclosure, which raised concerns about the bank’s condition. He also pointed to the inaccuracy of the bank’s financial statements, balance sheets, and financial positions, along with contradictions in the announced data, information, and statistics.

In his post, Al-Haddad added: “There is ambiguity regarding Libya’s foreign currency reserves abroad and fears surrounding them, especially after Al-Kabeer’s statement that they amount to $29 billion instead of the $84 billion reported in the International Monetary Fund’s report. Deloitte’s internationally commissioned financial audit reports have revealed very serious violations, breaches, and substantial risks in the bank’s procedures and operations.”

Al-Haddad further noted: “Deloitte and the Organized Crime and Corruption Reporting Project (OCCRP) disclosed suspicious practices involving significant manipulation in amending the contract between the bank and the British company De La Rue for printing currency. This resulted in massive losses amounting to $4.8 billion, or 6.5 billion Libyan dinars. Additionally, Libyan currency was unlawfully printed in Russia by the company Goznak at a very high cost of $6 per banknote, whereas the global standard at the time was between 4 to 13 cents per note. Furthermore, Deloitte’s report was concealed by Al-Kabeer and Al-Hibri, allegedly to preserve their positions and hide their corrupt practices.”

He also pointed out: “A report by the World Gold Council revealed the disappearance of 27.18 tons of Libya’s gold reserves held at the Central Bank in 2014. The bank failed to announce this reduction, as the reserves dropped from 143.82 tons to 116.64 tons. The IMF noted that the Central Bank recently purchased 30 tons of gold, which was considered an attempt to obscure previous facts and events. Additionally, Global disclosed suspicions of corruption and money laundering related to foreign credits and transfers exclusively directed by Al-Kabeer to ABC Bank in London.”

Al-Haddad concluded his post, stating: “Meetings held by former Governor Al-Kabeer and the current Acting Governor with ambassadors from various countries, where they disclosed secrets and information about the bank and the state’s condition, as well as meetings with international organizations, the U.S. Federal Reserve, and the U.S. Treasury in Tunisia, revealed the unstable situation of the Central Bank. These meetings confirmed the inefficiency, inexperience, and inability of the Acting Governor and his deputy to manage the bank’s affairs effectively, leading to the U.S. Treasury’s support for the Federal Reserve’s aforementioned measures.”

Al-Shaeibi: This Notice Signals a Serious Risk in the Relationship Between the Libyan Banking Sector and International Financial Institutions

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Economic expert Omran Al-Shaeibi an article saying: Social media platforms have circulated the letter sent by the Central Bank to the Audit Bureau based on the warning issued by the U.S. Federal Reserve to the Central Bank regarding subjecting its dollar-denominated transactions to review and auditing.

This notice signals a serious risk in the nature of the relationship between the Libyan banking sector and international financial institutions and requires dealing with it with utmost seriousness. This measure falls under the “de-risking” policy described by the Financial Action Task Force (FATF), where financial institutions terminate or restrict commercial relationships with clients or categories of clients to avoid risks instead of managing them, in line with FATF’s risk-based approach.

What is the significance of this measure and its implications?

Firstly, the loss of institutional trust, as this procedure expresses deep doubts from the Federal Reserve about the Central Bank of Libya’s ability to manage its financial operations in accordance with international standards, affecting the reputation of the Central Bank and consequently reducing international transactions.

Secondly, complicating international financial operations and subjecting them to rigorous reviews or involving a third party in auditing processes, as noted in the letter, which could lead to disruptions in critical financial operations such as collecting oil revenues or facilitating essential imports.

Thirdly, direct economic repercussions due to restrictions on dollar-denominated transactions that could result in delays in fulfilling the state’s external obligations, negatively affecting national economic stability and impacting the state’s ability to provide essential goods or maintain monetary stability.

The application of the “de-risking” policy by international financial institutions, according to the FATF, is not only related to risks of money laundering and terrorism financing but also reflects a comprehensive view of the concerned institution and its adherence to the forty international standards set by the FATF. This does not require formal justification, as it pertains to risk management based on internal evaluations.

The Central Bank must improve its procedures and prove its ability to adhere to international standards to regain the trust of correspondent institutions, prevent delays in international financial transactions, avoid disruptions in financial flows with the outside world, enhance anti-money laundering and terrorism financing measures, develop a robust system for implementing “Know Your Customer” procedures, raise transparency levels in managing financial operations, involve reputable and trusted financial institutions as third parties to manage risks, seek advisory support from international financial institutions to improve compliance standards, and work on a long-term strategy.

When the Central Bank was stormed in the past period through uncalculated methods, it prompted international institutions to take measures that will remain strict until confidence in the financial institutions of the Libyan state is renewed.

We also trust the new board of directors and the technical staff at the bank to overcome this obstacle successfully.

Exclusive: The Central Bank Reveals Arrival of a New Shipment of Cash from Abroad

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The Central Bank of Libya exclusively revealed toour source that a new shipment of cash arrived this evening from abroad. The cash was immediately transported to the Central Bank’s vaults to prepare it for distribution to all branches of commercial banks in Libya, in accordance with the previously approved timeline.

This step comes as part of the Central Bank of Libya’s plan to ensure cash availability, under the directives of Mr. Naji Mohammed Issa, the Governor of the Central Bank, and his deputy.

Abu Snina Writes About the Federal Reserve’s Warning to the Central Bank of Libya on Reviewing Dollar Transactions

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Economic expert Mohammed Abu Snina wrote about the warning issued to the Central Bank by the U.S. Federal Reserve regarding the review and audit of its dollar-denominated transactions:

This measure falls under what is known as D-Risking, a procedure adopted by international financial institutions when they perceive financial risks associated with their transactions with certain banks or financial institutions. This often leads to suspending transactions with them.

Typically, the risks necessitating the review of financial transactions of a central bank or a financial institution operating in international markets include money laundering and terrorist financing risks (AML-CTF), as well as weak “Know Your Customer” (KYC) procedures applied by financial institutions under scrutiny for financial risks.

The measure reflects doubts about the financial institution’s ability to manage its funds transparently, implying a loss of trust in its management. This loss of trust is the worst scenario any financial institution can face.

The Federal Reserve’s decision to request the involvement of a third party to review financial operations with the Central Bank indicates that the Federal Reserve faces challenges in managing risks associated with financial transactions with the Central Bank and the Libyan banking sector in general or in managing these risks efficiently.

Naturally, the procedures adopted by international financial institutions to hedge against financial risks resulting from their dealings with various institutions vary from one institution to another, depending on the level of expected financial risks.

To continue financial transactions with high-risk institutions, third-party financial institutions with robust risk management systems are often engaged. These institutions are chosen based on their reputation and the financial risk management system they adopt.

According to the Financial Action Task Force (FATF), the application of D-Risking to any institution indicates a complex situation that goes beyond merely complying with anti-money laundering and terrorist financing procedures. It requires adherence to the full forty recommendations and standards of FATF directed at financial institutions. Notably, institutions implementing D-Risking policies with their clients are not obligated to justify the procedure or base it on judicial rulings. Risk management is an internal matter determined by the financial institution itself. The institution subjected to this procedure or ban (the customer or client) is only required to comply and rectify its situation.

Underestimating or downplaying the significance and seriousness of subjecting the Central Bank to D-Risking risks does not serve the national economy or the future of the Libyan banking and financial sector. This issue should be taken seriously and requires a strategy to ensure the sustainability of financial transactions with the external world. Such a strategy is necessary to avoid delays and disruptions to dollar-denominated transactions with correspondent banks abroad, including the collection of oil revenues in dollars. These disruptions would affect economic stability, the supply of consumer goods, the state’s ability to meet its external obligations, and result in losses for the Central Bank and the Libyan banking sector as a whole.

Exclusive: Al-Zantouti Comments on the Central Bank of Libya’s Statement

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Financial expert Khaled Al-Zantouti exclusively told our source regarding the Central Bank’s recent statement: “The average Libyan household consumes imported goods and services worth over 21,000 Libyan dinars monthly, which is three times the value of our oil exports.”

He added, “I was deeply astonished by the Central Bank’s recent statement and the figures it disclosed. It stated that during just 18 days of December, $3.5 billion worth of currency purchase requests were processed. Of this, $1.7 billion was for letters of credit and another $1.7 billion for personal transfers—staggering figures.”

Al-Zantouti explained, “This means we are transferring approximately $200 million daily, equating to about one billion dinars per day, to fund imports and other purposes. And as for ‘other purposes,’ you can underline that ten times. One billion dinars daily—day after day—are spent by Libyans on food, drink, medical treatment, and other needs, all sourced in foreign currency and from outside Libya. This averages 143 dinars per individual per day, assuming a population of 7 million Libyans.”

He elaborated, “For a family of five, this translates to approximately 21,450 dinars in imported goods and services per month. (This assumes that the consumption by foreigners is ultimately borne by Libyans.) Is this reasonable?”

He added, “Now let’s take another perspective: Based on the average Brent crude price of $72.5 per barrel for the first 18 days of this month and factoring in daily export volumes, the foreign partner’s share, and local refinery consumption, Libya’s oil revenues will not exceed $1 billion over these 18 days. This means that even if the full value of these exports were deposited in the Central Bank’s external account, we would still face a hard currency deficit of over $2.5 billion. In essence, our consumption exceeds three times the value of our oil exports.”

He noted, “This analysis is solely for imported goods and services. It does not even account for salaries and other public budget expenditures. Whatever the reasons or justifications, even if tied to year-end processes or annual closures, these figures are alarming, frightening, and disheartening.”

He concluded with a wry remark: “And then they ask me, ‘Why are you pessimistic, Mr. Khaled?’”

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

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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.”