By Sami Zaptia.
London. 17 April 2017:
One of the leading Libyan bankers has called for pressure to be put on the Central Bank of Libya (CBL) to change its monetary policy and float the Libyan dinar.
Speaking yesterday on Iktisadia TV channel, the chairman of the Commerce and Development (C&D) bank, Jamal Abdulmalik, insisted that this was the only solution to Libya’s economic woes.
Referring to the experience of Jordan in solving its foreign currency exchange rate and valuation of its local currency, the C&D chairman said that this was the way forward for Libya.
Adulmalik noted that Jordan had a much smaller GDP, no oil revenues and ‘‘a fraction of Libya’s foreign currency reserves’’ yet it enjoyed a stable and working exchange rate and valuation of its local currency for years.
He noted that Jordan has been able to keep its currency stable and with a very small margin spread between the official and the black market rate and the buying and selling prices.
He felt that Libya’s current liquidity, foreign exchange and Dinar valuation problems would be fixed ‘‘in two months’’ if the Central Bank of Libya (CBL) removed its foreign currency controls. He maintained that the current sky-high black market exchange rate (at around LD 8 to the dollar as opposed to the official rate of LD 1.4 to the dollar) would fall to a lower rate and the liquidity crisis would also be resolved.
He called for ‘‘pressure to be exerted on the CBL’’ to implement this. ‘‘This is the only way to solve Libya’s economic problem’’ and relieve the beleaguered Libyan people from their suffering.
It must be noted that the C&D bank has been, rightly or wrongly, accused of cooperating with Libya’s black market traders. It is popularly perceived as the bank that uses most of its cheques for foreign currency transactions. Going even further in Libya’s current polarised political climate, it is also accused of wanting to exacerbate the foreign currency exchange crisis because of the fact that its head office is based in eastern Libya.
During the last clampdown by security forces, believed to be the Bab Tajura brigade, all C&D banks in Tripoli were closed and its staff were arrested. Most staff were later released but management was kept under arrest.
The Libyan Union of Chambers of Commerce and Industry has also called on Libyan authorities, including the CBL to take the necessary steps to save the Libyan economy by revaluing the Libyan dinar as well as implementing subsidy reforms.
The Tripoli-based Central Bank of Libya Governor Saddek El Kaber for his part has promised in a recently released press statement to address many of these issues in a press conference in the coming days.