On Sunday, the Central Bank of Libya (CBL) issued a serious warning that the country’s public debt is expected to surpass 330 billion Libyan dinars by the end of 2025, driven by unchecked public spending, the absence of a unified national budget, and continued financial practices that mirror those of 2024.
In an official statement, the CBL described the situation as “extremely dangerous and unsustainable,” warning that this trajectory is causing serious distortions to Libya’s macroeconomic structure. The current public debt, estimated at around 270 billion dinars, is divided between two central bank branches: 84 billion dinars linked to the Tripoli-based bank and 186 billion dinars to the Benghazi-based institution.
The Bank also revealed that it had been forced to draw on a portion of its foreign currency reserves temporarily to bridge the widening gap between supply and demand in the foreign exchange market. This intervention was aimed at reducing the balance of payments deficit, preserving exchange rate stability, and containing inflation to protect the purchasing power of Libyan citizens.
However, the CBL noted that ongoing political division and the existence of two rival governments have led to conflicting decisions and weakened the Central Bank’s ability to enforce a coherent and effective monetary policy.
Despite these challenges, the CBL reaffirmed its commitment to maintaining Libya’s foreign currency assets, which exceed 94 billion US dollars, including 84 billion in foreign reserves under its management.
The Bank emphasized that without urgent fiscal coordination, unified budgeting, and spending reforms, the country risks entering a severe debt spiral with long-term economic consequences.
