CBL Governor blames fall of Libya's dinar on closure of oil pipelines, withdrawal of cash from banks by businesspersons

CBL Governor blames fall of Libya's dinar on closure of oil pipelines, withdrawal of cash from banks by businesspersons

April 23, 2017 - 22:03
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Written By: AbdulkaderAssad

The Governor of the Central Bank of Libya (CBL) Al-Sidiq Al-Kabeer, has attributed the falling of the dinar's value against foreign currencies to the current political division, which also badly influenced the banking system as a whole.

In a press conference and a follow-up statement on the CBL's website Sunday, Al-Kabeer said the CBL will not stand idly by and allow the current war on the Libyan dinar to rage on, adding that the CBL will intervene with a group of powerful actions.

"Changing the official rate of the Libyan dinar won't stand as a solution on its own with a bundle of financial, economic and commercial reforms that are demanded of the legislative and executive authorities in Libya." He explained.

He further explained that Libya's lost about 160 billion dinars due to the shutdown of oil production that was coupled up with an unprecedented hike in expenditure, especially to cover government-paid jobs, leading to public debt estimated at 66 billion dinars, all because of increased expenditure and decreased revenues.

"Not to mention the withdrawal of money deposits and the emptying of bank accounts for the businesspersons in Libya accounting to about 30 billion dinars, leading to a cash shortage in the banks." He remarked, adding that such a shortage will never be contained by continuing to print new banknotes.

He also said that the chaotic process of founding private businesses without any regulations and standards led to the formation of hundreds of firms that are all gasping for obtaining letters of credits along which a lot of pressure was placed on the CBL and the commercial banks.

"Those new firms make up 60% of the shadow economy- the irregular and unorganized business." Al-Kabeer added,

On the other hand, Al-Kabeer praised the meeting of Aqilah Saleh, the Speaker of the House of Representatives and Abdelrahman Al-Sweihli, the Head of the High Council of State in Rome, saying it was a very significant gesture and a step on the right track toward ending the current political fragmentation in Libya.

"Also, reopening oilfields and resumption of oil production are two important steps on the right track." He indicated.

The CBL's Governor urged as well for supporting the National Oil Corporation to allow it to increase Libya's oil and gas production to the levels of 2010, which he said will strengthen the Libyan currency and end the suffering of Libyans.