By Sami Zaptia.
London, 7 December 2020:
The Tripoli-based Central Bank of Libya (CBL) reported today that its Board of Directors held what it referred to as a ‘‘preliminary’’ meeting today.
It reported that the meeting discussed the revitalization of the board’s work in a way that achieves the objectives of the Central Bank as set by law. The discussion included:
- The stability of the general level of prices and the support and safety of the banking system. the meeting aims
- The achievement of an optimistic forward outlook through (implementing) appropriate monetary policy.
- Adjusting the exchange rate in a manner that achieves the sustainability of financial and monetary integrity in the long term
- Directing financial policy towards undertaking important reforms.
The Tripoli CBL statement reported that the meeting was dominated by a spirit of optimism and a common vision to achieve the public interest as a common goal.
The black-market U.S. dollar exchange rate fell by about LD 0.37 to 6.00 on the news this afternoon.
The CBL board meeting comes on the back of progress in political talks by the contesting Libyan political streams in Tangiers and in the UNSMIL brokered Libyan Political Dialogue Forum (LPDF) in Tunis and virtually.
Specifically, it also comes on the back of the consultative meeting in Tripoli on 1 December of Libya’s top economic stakeholders to resolve the controversial matter of the freezing Libya’s oil revenues in a National Oil Corporation-controlled Libyan Foreign Bank account – rather than under the control of the Tripoli CBL..
The meeting discussed “the implications and effects of the process of freezing Libya’s oil revenues.”
On 1 December, the Libya Economic Working Group (EWG) co-chairs of the International Follow Up Committee for Libya resulting from the Berlin Libya Conference, including Ambassadors of Egypt and the United States, the European Union, and the Acting Special Representative of the Secretary-General Stephanie Williams, as well as representatives of the Libyan Economic Experts Commission, met to discuss the deepening Libyan economic crisis.
The EWG meeting supported UNSMIL’s efforts to swiftly convene a meeting of senior technocrats and decision-makers from Libyan economic and political institutions to agree on a series of immediate measures to be taken, including the need to convene a CBL Board meeting at the earliest opportunity to, in particular, unify the exchange rates and address the deteriorating banking crisis.
To protect Libyan wealth in the interim, the EWG co-chairs voiced support for the National Oil Corporation in its responding to calls by the Libyan public to freeze oil revenues under apolitical management as an exceptional and temporary measure until a more durable economic arrangement is negotiated among Libyan parties either on an initial interim basis or in the longer-term context of the Libyan Political Dialogue Forum.
Until such an arrangement is achieved, Libyan foreign reserves remain adequate to provide for the critical expenses of the 2021 budget, including wages, subsidies, and public services required by all Libyans, the statement read.
This last point concerning foreign reserves concerns the Tripoli CBL which has been bailing out successive government deficits from its reserves and may have helped force its hand into holding a unified CBL Board meeting.