The Turkish Anadolu Agency reported on Sunday that China’s cross-border interbank payment system will allow Libyan banks to send and receive payments directly in Chinese yuan.
The agency indicated that Central Bank of Libya Governor Naji Issa and Governor of the People’s Bank of China Pan Gongsheng agreed to connect Libyan commercial banks to China’s payment and settlement system.
According to the agency, Issa, who is visiting Beijing, met with the Chinese central bank governor on Friday. During the meeting, they reviewed the volume of trade between the two countries and discussed ways to strengthen bilateral trade and increase its growth rate.
The statement said:
“The importance of launching a new phase of a genuine strategic partnership between the two central banks was discussed. Both sides agreed to connect Libyan commercial banks to the Chinese Cross-Border Interbank Payment System (CIPS), which will simplify financial transfers and make them easier to execute.”
The statement added that the CIPS system, launched by the People’s Bank of China in 2015, aims to facilitate international transfers using the Chinese yuan. It serves as an infrastructure that enables banks to send and receive yuan-denominated payments directly, reducing reliance on the US dollar by eliminating the need to process transactions through intermediary banks.
The agency further reported that both sides agreed to address existing obstacles and facilitate trade procedures in a way that would increase trade volume between the two countries. This would begin with the implementation of direct financial transfers to China, making transactions easier for small-scale traders.
The two sides also agreed to allow letters of credit to be opened directly through Chinese banks.
According to the statement, they also agreed to arrange a visit to Beijing by an official Libyan banking delegation headed by the Central Bank Governor and accompanied by the directors of Libyan commercial banks.
The statement confirmed that the planned visit aims to establish cooperation between commercial banks in both countries and benefit from China’s experience in electronic payments and direct financial transfers.
The statement added that these measures would help reduce reliance on the informal market, ensure compliance with anti-money laundering and counter-terrorism financing standards, and improve the reputation of Libya’s banking sector, according to the agency.
