On Saturday, Libya’s key political and financial leaders convened in a crucial meeting to address the sharp increase in foreign currency demand, which has escalated by $5 billion in the year 2023.
The meeting brought together Mohamed Al Mnifi, the Head of the Presidential Council, Abdelhamid Dbaiba, the Prime Minister of the Government of National Unity (GNU), and Siddiq Al-Kabeer, the Governor of the Central Bank of Libya (CBL).
Their discussions centered on understanding the surge in demand for foreign currency and devising strategies to mitigate its impact on the national economy.
In a statement, the CBL revealed that the assembly, which included the Minister of Finance and other high-ranking officials, delved into measures to tighten control over the country’s borders. This effort aims to curb the smuggling of goods, keeping in view the existing import contracts worth $4 billion, approximately 20 billion Libyan dinars.
Furthermore, the meeting assessed the fiscal outlook for 2023, emphasizing the role of the Financial Committee in forecasting revenues and expenditures for 2024. The officials also explored avenues for prudent spending, particularly focusing on the audit of fuel imports for private use and the fuel consumption patterns of the General Electricity Company.
This gathering signifies Libya’s proactive stance in addressing its economic challenges, particularly the notable rise in foreign currency demand. It reflects the government’s dedication to ensuring economic stability and fostering sustainable growth through judicious fiscal policies and effective resource allocation amidst increasing foreign exchange requirements.
Libya’s economy has faced multiple challenges over the past decade, primarily due to political instability and conflict. The country’s reliance on oil exports for revenue has made it vulnerable to fluctuations in the global oil market. Additionally, the ongoing conflict has severely impacted infrastructure and reduced the capacity for domestic production, increasing reliance on imports for basic goods and services.
The surge in demand for foreign currency can be attributed to several factors, including the need to finance imports and the lack of confidence in the domestic currency, leading to a preference for foreign currency holdings among the populace. The situation is further complicated by the parallel economy and the black market for foreign currency, which undermine the official financial system.