The Governor of the Central Bank of Libya, Naji Issa, has sent several letters, widely leaked today to Arabic-language Libyan media, to the Tripoli based Libyan Prime Minister, the Internal Security Agency, the Ministry of Interior, and the Municipal Guards Authority, instructing them to close unlicensed foreign exchange offices that have not been granted operating permits.
Prohibiting imports and exports except through banking transactions
The CBL Governor also addressed PM Abd Alhamid Aldabaiba, urging him to direct the Ministry of Economy to issue a decree prohibiting import and exports except through banking transactions.
Implementing genuine economic reforms
The Central Bank has also continued to urge all relevant parties to implement genuine economic reforms to improve the economic situation and benefit citizens’ living standards. This includes proposing a package of measures to raise the value of the Libyan dinar, ensure the availability of cash liquidity, and reduce the general price level and inflation rate.
The Central Bank of Libya (CBL) warned of the increase in the activities of unlicensed offices in the black market, explaining in the letters that it has observed a remarkable development in the circulation of foreign currencies and the Libyan Dinar outside the registered framework.
This diverse group includes the uncontrolled transfer of funds inside and outside Libya, and the financing of illegal activities, in clear violation of the commercial activity regulatory legislation, the Anti-Money Laundering and Combating the Financing of Terrorism Law, as well as its contribution to the re-appreciation of foreign currency prices in the market
The Central Bank called for taking the necessary legal measures for all unlicensed companies and offices, and for detecting violators, in addition to tightening the elimination of the movement of funds, and verifying their sources and legitimacy, in accordance with their laws.
Background
It will be recalled that the CBL Governor’s letters come on the back of several recent meetings by the Economy Ministry, the Prime Minister and the Central Bank of Libya. These come with the background of global prices of a barrel of oil (Brent Crude) falling to US$ 55, negatively affecting the Libyan state’s main revenue, the Libyan dinar on the black-market at one stage last Wednesday falling to LD 8.40 per US$, putting further pressure on rising commodity prices, and the continuing cash crisis at Libyan banks.
Governor Issa’s promises unfulfilled
It will be recalled that CBL Governor Naji Issa had promised in August this year that the LD will strengthen to under LD 7 per dollar on the black-market and that the cash crises will end by 1 October this year. Neither aims have been achieved.
Part of the CBL’s wider reform measures
The various ongoing efforts by Naji Issa come within his CBL’s wider effort to reform Libya’s economic, monetary, fiscal and financial system to reduce money laundering, reduce the grey economy and tax evasion, reduce demand for the US dollar in the black-market, strengthen the Libyan dinar and stabilise inflation and prices.
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