The Central Bank of Libya (CBL) expressed distress over March’s low oil revenues, threatening Libya’s fiscal sustainability.
The alert came after it announced today that it has continued the provision of foreign exchange for various purposes, to meet the needs of the local market and to maintain the stability of the Libyan dinar exchange rate, which contributes to supporting monetary, financial and economic stability.
March FX sales were US$ 2.3 billion
The Central Bank revealed that the total foreign exchange sales carried out during the period from March 1 to 17 amounted to US$ 2.3 billion, of which US$ 1.2 billion was for documentary credits, and US$ 1.1 billion for personal purposes.
Facing major challenges due to decline in oil revenues
However, the CBL revealed that oil revenues supplied during March amounted to only US$ 778 million, adding that the Central Bank is still facing major challenges represented in the decline in public revenues due to the decline in oil revenues and delayed collection.
Threatening fiscal sustainability
This decline in revenues, it added, is compounding pressure on foreign reserves, and the continued rise in spending, by both the Tripoli based and eastern based parallel Libyan government, leads to increased demand for foreign currency, threatening fiscal sustainability.
Comment
The sounding of the alert by the CBL, and as covered in detail earlier this month by Libya Herald, continues the trend since 2011 of the tension between it and the government of the day over so-called fiscal responsibility.
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CBL’s latest revenues and spending data reveals a dinar surplus but a dollar deficit
