Bread Crisis in Libya Continues. CBL Rejects New Letters of Credit for Flour

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On Sunday, the Governor of the Central Bank of Libya (CBL), Al-Siddiq Al-Kabeer issued a statement in response to the Prime Minister of the Government of National Accord (GNA) Fayez Al-Sarraj’s letter regarding opening new letters of credit to import flour to cover the markets’ demand.

According to the statement, Al-Kabeer emphasized that the letters of credit, which were opened in 2020 for the supply of flour, were appropriate for the amounts consumed in the North African country.

He explained that the state’s balance of foreign exchange with the Libyan Foreign Bank (LFB) is related to sovereign revenues. He noted the PM’s call represents a grave breach of the country’s financial law and public spending controls, stipulated in the 2015 Libyan Political Agreement (LPA).

The governor also denied that it had opened any letters credits for importing unnecessary foodstuffs, saying that all rumours in this regard are completely baseless.

He renewed his call for GNA officials to control the country’s borders and ports to curb the smuggling of subsidized goods, especially flour and fuel.

The General Union of Bakers in Tripoli shut down all bakeries in the city on Saturday, due to an increase in the price of ingredients. This move was justified by the union’s head, Saeed Boukhreiss who claimed the new prices of, “three loaves for one Libyan dinar” were necessary due to the new prices of flour being linked to lack of supply by the mills’ company.

“The prices of wheat increased globally by 40% and the new exchange rate of the Libyan dinar to US dollar didn’t exclude our sector,” Boukhreiss stated. He expressed fears that bakeries will face a difficult situation in the coming period, if state authorities do not resolve the problem.