In a letter leaked on Libyan media dated 12 February, the Governor of the Central Bank of Libya (CBL), Naji Issa, requested that Libya’s Minister of Foreign Affairs instruct all embassies, missions, and international organizations operating in Libya to advise their citizens to refrain from buying or selling foreign currency except through foreign exchange bureaux licensed by the CBL.
This, the CBL letter added, in order to avoid legal repercussions. Dealing in foreign currency outside the official sector is considered illegal, the letter stated.
It will be recalled that numerous gold shops in the Old City’s Gold Market and other shops elsewhere across Tripoli currently openly buy and sell foreign currency. The CBL wishes to put an end to this. There is also a daily gathering of FX traders in the Clock Square in the Old City – located in the road behind, and literally in the shadow of, the CBL.
CBL calls on Interior Ministry and Municipal Guards to close unlicensed FX Bureaux
In the same vein, in two other separate leaked letters (dated 12 February) directed to the Minister of Interior and the Head of the Municipal Guard, the Governor of the CBL, requested the closure of all shops, companies and offices that have not been granted final permission to conduct money exchange activities by the CBL.
The CBL Governor requested the punishment of anyone who trades in foreign currency outside the official sector and requested the monitoring of the movement of funds in Libyan dinars and verifying their legitimacy and sources.
Part of a wider effort to reform the economy
The latest initiatives by the CBL come on the back of the Libyan dinar falling to US dollar 9.70 last Wednesday (11 February) despite all the CBL’s efforts to keep it within the LD 6 to the dollar range.
The moves by the CBL come as part of a wider concerted effort by the Tripoli government, the CBL and the Audit Bureau to:
- – Curb LC fraud.
- – Curb the exploitation of the country’s finite foreign currency reserves – Libya has been running a hard currency deficit for several years.
- – Defend the value of the faltering Libyan dinar on the black-market.
- – Reduce prices and imported inflation.
- – Maintain Libyan’s standards of living.
- – Reducing the cash market by offering bonds and increasing e-payments
The Libyan authorities are worried about a political backlash due to increasing prices. This is especially the case with the high consumption fasting month of Ramadan starting next week.
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Economy Ministry prohibits commodity pricing based on the black-market exchange rate
CBL’s role in granting LCs is limited – does not include assessing Libya’s economic needs
