LIBYAPROSPECT – Heba Mahmoud
Cash crisis and dollar shortage continue amid the growing financial crisis hitting Libya, with the declining currency value, despite relative détente in oil exports rates.
According to a report written by the economic editor, Ahmed Khumaisy, and published by Al-Araby Al-Jadid website (translated here by LIBYAPROSPECT), since the Presidential Council (PC) arrived to Tripoli, the Central Bank of Libya (CBL) is still divided between the east and west, there is nothing but a war of statements between the PC and the CBL in Tripoli.
Sources close to the CBL governor in Tripoli revealed that the bank wouldn’t take any procedures in the meantime about the current economic crisis.
Economists predict that the CBL to fluctuate exchange rates or to sell Libya’s gold reserves till political stabilization is achieved, and all economic distortions are addressed. But sources mentioned a pact of procedures still under consideration and evaluation to regain customers trust in the banking system.
The Head of Cash Committee in the CBL, Ramzy Agha, said that “the CBL governor, Ali Hebry, suggested to modify dinar exchange rates against foreign currencies to reduce governmental expenditures from foreign currencies and remove subsidies.”
The CBL, in its response to the head of the PC, Fayez Al-Sarraj, statements, pointed that Libya’s gold reserves are “the latest defense line,” and even if sold, it will only cover a quarter of our cash needs.
Libya comes in the 31st place on the World Gold Council list, and the fourth among Arab countries, with a growth rate 4.5%, with 166 tons of gold reserves that worth 5 billion dollars.
Regarding the provision of hard currency in local markets, the CBL said that the only source of foreign currency is the oil production and exports. It added that “we can’t provide money in the wake of the current instability and looting Libya faces.”
It is worth mentioning Daesh, previously, stole 50 million dinars from Libyan banks.
The CBL expressed intention to change dinar exchange rates, within a comprehensive plan to address economic disfigurations, to reach the desired results.