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A 247,000-bpd oil production increase would achieve US$ 6 billion annually to enhance ability to meet FX demand, maintain strength of LD and achieve economic balance: CBL ‎
A 247,000-bpd oil production increase would achieve US$ 6 billion annually to enhance ability to meet FX demand, maintain strength of LD and achieve economic balance: CBL ‎

Libya Herald

time7 hours ago

  • Business
  • Libya Herald

A 247,000-bpd oil production increase would achieve US$ 6 billion annually to enhance ability to meet FX demand, maintain strength of LD and achieve economic balance: CBL ‎

‎The Governor of the Central Bank of Libya meets the Chairman of the Board of Directors of the National Oil Corporation to discuss mechanisms to support the increase in oil production‎ ‎Governor of the Central Bank of Libya (CBL), Naji Issa, held an extensive meeting today with the Chairman of the National Oil Corporation (NOC), Massoud Suleiman Moussa, in the presence of the Chairman of the Management Committee of the Libyan Foreign Bank and its General Manager, with the participation of several directors of departments at the CBL and NOC.‎ ‎Supporting NOC efforts to increase production by 247,000 During the meeting, they discussed ways to support the efforts of the NOC to increase production by about ‎‎247,000 barrels per day, which would achieve additional revenues estimated at about US$ 6 billion annually, in order to enhance the ability of the CBL to meet the demand for foreign exchange, maintain the strength of the Libyan dinar, and achieve the desired economic balance. ‎ ‎It was also stressed the importance of continuing to hold bilateral meetings and meetings between the CBL and the NOC to increase coordination and to provide the necessary financial resources to implement planned projects through local and external financing channels, including the Libyan Foreign Bank and a number of international banks with the aim of enhancing the productive capacities of the oil sector.‎ ‎The meeting also included a visual presentation by the NOC the plan to improve oil production in Libya for the years 2025 and 2026.‎

All imports into Libya must be paid for through official bank transactions
All imports into Libya must be paid for through official bank transactions

Libya Herald

time8 hours ago

  • Business
  • Libya Herald

All imports into Libya must be paid for through official bank transactions

‎The Tripoli based Libyan Ministry of Economy and Trade has request that the Libyan Customs Authority start to implement its decree No. 42 of 2025 regarding the prohibition of imports and exports except through banking operations approved by the Central Bank of Libya (CBL). The decision applies to all Libyan ports of entry. The decision was first announced in the first quarter of this year and was planned to be implemented on 1 April. However, it was suspended due to objections from smaller importers. Analysis: Rationale and drawbacks Today's Ministry of Economy and Trade decision came on the recent prompting by the CBL. This comes as part of the CBL's efforts to reduce demand on hard currency in the black market, retain the value of the Libyan dinar in the black market and fight inflation. It will be recalled that the previous Tripoli based Libyan government under Faiez Sirraj had also unsuccessfully attempted to prohibit the import of goods without bank payment through decree 560 of 2020. It is also unclear if the eastern Libyan government will implement this western Libyan government decree. If it is not implemented in the east, it may divert some imports to eastern ports to be transported by road to western Libya. This would defeat the object of this decree CBL restricted list of importable goods through LCs One of the problems with official LCs is that the CBL and Economy Ministry had taken it upon themselves in the past to draw up a list of what they sees as necessary goods and products for which LCs can be opened. The CBL sees this as part of its effort to preserve Libya's diminishing hard currency reserves in view of the country's economic crisis. Libya's budget has been operating on a deficit for years made up through CBL loans. The deficit has been caused by several factors over the years. These include over dependence on hydrocarbons, Libya's politically motivated oil closures and the crash in international crude oil prices, the lack of diversification of the Libyan economy, the lack of local industry leading on a dependence on imports paid for by hard currency, a lack of control at ports and the failure to impose customs duties. Customs duties can direct imports, restrict demand and earn the state revenues. An attempt to solve the cash crisis The CBL also uses the implement of official LCs, by insisting a proportion of LCs is paid for in cash not by cheque or bank transfer, to force Libyan importers to get their cash hidden in their homes out into circulation. This they hope will help reduce the country's cash crisis. As a result of the loss of confidence by the public in the Libyan authorities, Libyans have been hoarding their cash at home. This has left the banks dry. Reduce the price of hard currency on the black-market Nevertheless, the imposition of restrictions on what goods can be imported leaves a raft of goods that cannot be imported through LCs. This gap has been filled by the nimble private sector who buy hard currency on the black-market (or who have hard currency abroad) to meet demand for goods off the LC list. Inflation, prices and cost of living Hence allowing goods to be imported outside the LC system creates demand for hard currency on the black-market. This helps push up the price of hard currency which has a knock-on effect on inflation, prices, cost and standard of living. Small business and grey economy There are many small businesses operating in the grey economy who also prefer to import goods using cash. That way they avoid the taxman and the red tape and bureaucracy of opening LCs. There are also accusations of corruption by bank officials in facilitating the opening of LCs. Taxing the grey economy By restricting the payment of imports to official banking transactions, the authorities would also have a better chance to tax small businesses operating in the cash grey economy. It is unclear if the Tripoli government will be able or willing to implement this new procedure to the letter. For example, Tunisian and Egyptian SME exporters and farmers engage in instant cross-border trade, especially for seasonal fruit and vegetables. These type of farmer exporters are used to the traditional cash-based transactions, reacting to the farming season and instant demand from Libya based on phone calls as prices in Libya become favourable. . CBL demands imports are conducted through official banking instruments and the elimination of the FX black market Imports at ports not paid for by LCs will no longer be released after 31 December Tripoli Libyan government reverses decision on imports needing LCs Libyan imports to continue to be allowed to enter without Letters of Credit payment prerequisite Fraudulent Libyan Letters of Credit money entering international financial system via London – Report CBL allows for opening of LCs for imports through land borders Tunisian goods entering Libya by land will no longer need to be paid for through Letters of Credit Acting Economy Minister meets smaller merchants objecting to restricting imports to official banking transactions

High Council of State calls on AG to probe illegal 50-dinar banknotes
High Council of State calls on AG to probe illegal 50-dinar banknotes

Libya Observer

timea day ago

  • Business
  • Libya Observer

High Council of State calls on AG to probe illegal 50-dinar banknotes

The High Council of State (HCS) has called on Libya's Attorney General (AG) to launch a comprehensive and independent judicial investigation into the circumstances surrounding the issuance of 50-dinar banknotes outside the legal framework. The Council urged the identification of legal responsibilities and the implementation of necessary measures to protect public funds and safeguard the financial system. The HCS emphasized that issuing national currency is an exclusive mandate of the Central Bank of Libya (CBL), and any breach of this mandate constitutes a serious violation of monetary sovereignty, rendering the perpetrators legally accountable. It described the printing of large quantities of 50-dinar notes outside official channels—whether in the UK or Russia—as 'null and void under the law.' The HCS held fully accountable all individuals or institutions involved in, facilitating, or covering up the unauthorized printing—whether inside financial institutions or outside them. It called for clearly identifying both institutional and personal responsibility and for holding anyone who breached their duties or exceeded their authority accountable. It further warned that injecting large sums of cash outside the official financial system had caused disruptions in the currency market, increased inflation, and devalued the Libyan dinar—burdening citizens, weakening their purchasing power, and eroding trust in the state's financial system. On Sunday, the Central Bank of Libya announced that it had detected 3.5 billion dinars from the second issuance of 50-dinar notes printed in Russia and withdrawn from circulation, which were not recorded in the records of its Benghazi branch. The CBL said a preliminary count and sorting process showed that 6.65 billion dinars had been issued from this batch, while approximately 10.211 billion dinars were deposited into the CBL. Meanwhile, the Prime Minister of the Government of National Unity, Abdul Hamid Dbeibeh, described the discovery of this unaccounted-for currency as a serious issue affecting the core of Libya's economic stability—its national currency—and impacting people's lives and livelihoods. He called on the Attorney General to immediately launch a full investigation and hold all those involved in what he called a 'crime that cannot be ignored or tolerated' accountable.

CBL demands imports are conducted through official banking instruments and the elimination of the FX black market
CBL demands imports are conducted through official banking instruments and the elimination of the FX black market

Libya Herald

timea day ago

  • Business
  • Libya Herald

CBL demands imports are conducted through official banking instruments and the elimination of the FX black market

In a series of letters leaked by credible Libyan media sites, the Central Bank of Libya (CBL) continues its efforts to positively affect the Libyan economy through retaining the value of the Libyan dinar by controlling the black-market trade in foreign exchange. Restricting imports through import licences – prerequisite payments through banks – no cash In one letter, the Governor of the Central Bank of Libya, Naji Issa, addresses the Minister of Economy and Trade regarding the resumption of the suspended decision on approving an import and export ruling, which prohibits the practice of import, export and re-export activity except through banking operations approved by the Central Bank of Libya. ‎ ‎Opening foreign currency accounts for FX Bureaux The Central Bank of Libya instructed in another leaked letter commercial banks to open foreign exchange denominated accounts for recently CBL licenced foreign exchange bureaux and companies, and to replenish these accounts in foreign currency by the Central Bank of Libya and any other sources approved by it.‎ ‎Eliminating the foreign currency black-market In another letter, the CBL stressed the importance of eliminating the parallel (black) market for the transfer, sale and purchase of currency that have serious repercussions and damage on the Libyan economy‎. CBL's recall of LD and LD 20 denominations it will be recalled that last Sunday (29 June) the CBL had announced that during its recent recall of the old LD 50-dinar denominations (second series) printed by the eastern based authorities in Russia, it had discovered more than LD 3.5 billion in counterfeit notes. It said this constitutes serious damage to the national economy.‎ ‎The bank explained that what was issued from the first issue in denomination of 50 dinars amounted to 7 billion dinars, while the amounts supplied to the Central Bank of Libya amounted to approximately 6.828 billion dinars.‎ ‎Risk of money laundering and terrorist financing The bank said that printing this denomination in large quantities outside its control negatively affected the value of the Libyan dinar, contributed to increasing the demand for foreign currencies at significant levels in the parallel / black market, and doubled the risks of money laundering and terrorist financing.‎ . CBL reveals discovery of LD 3.5 billion in counterfeit 50-dinar notes printed in Russia – PM calls on Attorney General to open investigation

Libya's economy showed recovery in 2024, remained resilient despite reliance on hydrocarbons and ongoing political and security instability: World Bank
Libya's economy showed recovery in 2024, remained resilient despite reliance on hydrocarbons and ongoing political and security instability: World Bank

Libya Herald

timea day ago

  • Business
  • Libya Herald

Libya's economy showed recovery in 2024, remained resilient despite reliance on hydrocarbons and ongoing political and security instability: World Bank

According to the World Bank's latest Economic Monitor for Libya, released yesterday, Libya's economy showed promising signs of recovery in 2024 and remained resilient despite challenges arising from its reliance on hydrocarbons and ongoing political and security-related instability. The report says Libya's economy contracted by 0.6 percent, primarily driven by a 6 percent decline in oil GDP, influenced by political and institutional disruptions stemming from the Central Bank of Libya (CBL) crisis in August. However, non-oil GDP grew by 7.5 percent, driven by strong private and public consumption, partially offsetting the decline. This performance underscores the reliance on the oil sector and the need for structural reforms to boost non-oil sectors and reduce hydrocarbon volatility while also addressing political instability and improving governance, the report notes. Looking ahead to 2025, Libya's economy is expected to rebound, primarily by the expansion of oil sector activities. Oil production is projected to average 1.3 million barrels per day, surpassing its ten-year historical average and marking a 17.4 percent increase from 2024. Consequently, GDP is anticipated to grow by 12.3 percent, and non-oil GDP growth is expected to remain around 5.7 percent, supported by consumption and exports, but is projected to slow to 4 percent in the medium term. However, the outlook is clouded by uncertainty, while increased political stability would provide significant benefits for the Libyan economy and population. At the same time, energy prices are dependent on global growth prospects and future OPEC+ production levels. 'Libya is on a path of economic improvement, and achieving political consensus on transparent and efficient management of the country's oil wealth would significantly contribute to further stabilizing the country and enhancing the well-being of its citizens,' said Ahmadou Moustapha Ndiaye, Division Director for the Maghreb and Malta at the World Bank. 'In the medium term, the main economic challenge remains diversifying the economy and reducing dependence on hydrocarbons by promoting private sector-led growth and job creation.' The Libya Economic Monitor features a special chapter, 'Redefining the Role of State-Owned Enterprises in Libya,' which explores an extensive network of nearly 190 state-owned enterprises (SOEs) across strategic sectors, including oil, finance, and utilities, highlighting their significant impact on fiscal sustainability and private sector growth. With only limited data available, the analysis draws attention to the substantial fiscal challenges, inefficiencies, and market imbalances associated with the prevalence of SOEs across Libya. These challenges are particularly evident in sectors such as infrastructure and banking, which are characterized by persistent losses and overstaffing. This state dominance crowds out the private sector, prevents innovation, and limits competition – leaving the country with an economy heavily dependent on hydrocarbons. International experience shows that reforms such as enhancing state oversight, liberalizing competitive sectors, and fostering private investment through public-private frameworks can reposition the state as a regulator and promote private-sector-led growth and diversification. Libya: Leveling the Playing Field Towards Private Sector Growth

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