Libya's central bank to issue letters of credit to end liquidity crisis

Libya's central bank to issue letters of credit to end liquidity crisis

March 10, 2016 - 11:44
Posted in:
Written by: AbdullahBenIbrahim

The Central Bank of Libya agreed on Wednesday to issue letters of credit to importers in a bid to end hike in food prices and cash shortages in the country's banks.

Following a joint meeting between the General National Congress, Salvation Government, CBL and the Audit Bureau, an agreement was reached to open $2 billion of letters of credit at a bank rate of around LYD 1.38 to import basic goods and medicines and end cash crisis.

Libya is going through a severe liquidity crisis with many banks limiting withdrawals to less than LYD 500 dinars while other banks remained closed, which angered customers and caused recession in the local market.

Economic experts said after the issuance of credits, around LYD 3 billion would be deposited in the banks, which will end the liquidity crisis.

Early this week, the Head of the Media Bureau in the Central Bank of Libya, Essam Al-Oul, that the amount of money circulating outside the banking sector is more than LYD24 billion, all of which owned by businessmen.