A source has informed Libya Herald that Central Bank of Libya (CBL) Governor Naji Issa revealed a package of new economic and monetary measures aimed at supporting the value of the Libyan dinar and regulating the foreign exchange black-market. This announcement came on the sidelines of the conclusion of Article IV consultations with the International Monetary Fund held in Tunis today.
Issa confirmed that the CBL has developed a comprehensive plan to support the value of the Libyan dinar. This plan includes the regular injection of foreign currency and expanding the sale of US dollars in cash through banks and exchange companies, while also activating the role of these companies to increase the efficiency of foreign currency distribution in the market.
CBL aims to reduce the gap between the official and black-market rates to 5 percent
He explained that the CBL is working on establishing new, more flexible mechanisms for dealing with foreign currency. These mechanisms include facilitating transfers between the accounts of individuals, merchants, and companies, as part of efforts to regulate the foreign exchange (black) market and reduce the gap between the official and black-market rates to approximately 5%.
CBL aiming for LD 6.90 per dollar
He indicated that reaching an exchange rate of around 6.90 dinars to the dollar remains a feasible goal after unifying public spending. He emphasized that advanced understandings have been reached to adopt a unified spending framework, which will alleviate pressure on the exchange rate and enhance financial stability. He added that the CBL will launch a programme for subscribing to restricted deposits for a one-year term, granting depositors the option to purchase foreign currency up to 70% of the deposit’s value, which can then be accessed through local and international transfers.
Regular monthly dollar injections until the end of the year
Issa also announced that the plan to address the liquidity crisis has yielded positive results, noting the existence of a programme to boost liquidity in the economy, alongside the continued issuance of new banknotes. He affirmed that the bank is capable of providing dollars according to market needs, with the plan beginning with an injection of $1.5 billion and continuing with regular monthly injections until the end of the year.
Warning to small traders
In a related context, the Governor urged small traders to avoid dealing with the parallel market to prevent potential losses, emphasizing that regulating the exchange market is a priority for the Central Bank.
Libya’s e-transactions exceed 80 percent
He pointed out that financial inclusion efforts have made significant progress, with electronic transactions exceeding 80% of market transactions, with a target of reaching 95%. He anticipated that prices for electronic payments would be lower than those for cash payments.
He also noted the success of the electronic payroll system, “Your Salary Instantly,” in enhancing transparency and recovering deductions for the benefit of citizens, with a plan to include approximately 2.4 million employees in the system in cooperation with the Ministry of Finance.
Proposals to improve citizens’ living standards
Issa revealed that proposals are being studied to improve citizens’ living standards, including subsidizing certain goods or providing direct cash support, along with price controls to mitigate any increases that might affect citizens’ livelihoods. He also emphasized the ongoing cooperation with the National Oil Corporation to support plans to increase production and boost public revenues.
