Dr. Ayoub Mohamed Al-Farsi, a member of the Central Bank of Libya’s (CBL) Monetary Policy Committee, stated exclusively to Libya Herald that the CBL is implementing a comprehensive plan throughout 2026 to address the liquidity crisis and establish monetary stability.
This plan focuses on tackling the structural causes of the crisis rather than merely injecting cash into the market.
New polymer 50-dinar note
Al-Farsi noted that the CBL has contracted to print 90 billion Libyan dinars to replenish currency shortages and replace old banknotes with new issues. This includes the introduction of polymer 50-dinar and 10-dinar notes, produced to the latest international standards.
Injecting approximately 5 billion dinars monthly into bank branches
He indicated that, starting in August, the Bank would begin injecting approximately 5 billion dinars monthly into bank branches and ATMs, ensuring consistent liquidity availability and restoring public confidence in the banking system.
e-transactions reached 500 billion dinars by July 2026
He added that digital transformation is a key pillar of current monetary policy, explaining that the value of electronic transactions reached approximately 500 billion dinars by the end of July 2026, with projections exceeding 800 billion dinars by year-end.
He emphasized that this development helps reduce reliance on physical cash, enhances the efficiency of the payment system, lowers currency printing and management costs, and supports the transition toward a more efficient and organized digital economy.
Al-Farsi noted that the Central Bank of Libya has succeeded in narrowing the gap between the cash exchange rate of the dollar and the rate applied to checks and electronic payment methods; the differential dropped from approximately 1.6 dinars per dollar to just 100 dirhams. He considered this achievement a restoration of confidence in banking payment instruments and a factor in curbing the speculation that had previously undermined market stability and citizens' purchasing power.
To integrate expat workers into formal financial system
Regarding the regulation of the currency market, he explained that the Bank is working to integrate expatriate workers into the formal financial system by linking them to payment methods and electronic wallets.
Exchange rate stability
Al-Farsi added that exchange rate stability is a primary objective of monetary policy, emphasizing that the CBL continues to utilize various tools to maintain stability in the foreign exchange market and curb volatility. These efforts contribute to bolstering confidence in the Libyan dinar and improving the business and investment environment.
Sustaining foreign currency reserves
He pointed out that the CBL’s robust foreign reserves provide a solid foundation for monetary stability; however, sustaining this stability requires rationalizing public spending, boosting non-oil revenues, and enhancing the efficiency of state financial resource management to alleviate pressure on the demand for foreign currency.
Continuing to develop the banking sector's infrastructure
He further explained that the CBL continues to develop the banking sector's infrastructure by modernizing payment systems, strengthening cybersecurity, and expanding digital banking services, thereby enhancing the quality of services provided to citizens and increasing the efficiency of financial operations.
Monetary reform needs economic and fiscal reforms
Al-Farsi emphasized that monetary reform cannot fully achieve its objectives in isolation from economic and fiscal reforms. He stressed the importance of coordinating monetary and fiscal policies, unifying public spending, exercising fiscal discipline, and improving the investment climate—all of which contribute to sustainable economic growth and the creation of new job opportunities.
He added that the CBL would continue to periodically assess the outcomes of the measures taken and respond to any domestic or external economic developments. This approach aims to ensure price stability, provide necessary liquidity to the economy, and strengthen the resilience of the banking sector.
Al-Farsi concluded his statement to Libya Herald by saying: “Our goal is not limited to addressing the liquidity crisis; rather, it is to build a modern, efficient, and transparent monetary and banking system that supports the transition to a digital economy. This will boost the confidence of citizens and institutions in the banking sector and foster a more stable environment for growth and investment in Libya.”
It will be noted that the LD closed at 8.80 to one US dollar on the foreign exchange black-market. CBL Governor Issa had vowed to bring it down to under LD 7 per dollar.