LIBYA'S TWO BRANCHES OF THE CENTRAL BANK SIGN AN AGREEMENT TO UNIFY
2022-01-22102 view
On Thursday, January 20, 2022, the two branches of the Central Bank of Libya in the east and west of the country signed an agreement on a four-stage plan aimed at reunifying the Central Bank of Libya.
This comes in light of a broad Libyan and international political movement that aims to reach a political agreement on the country's future, based on holding presidential and parliamentary elections, which are still faltering today.
The two branches of the Libyan Central Bank said they had taken a major step toward reunification as part of UN-backed peace efforts between the warring factions there.
The Central Bank of Libya was divided, when Libya was divided in 2014 after the overthrow of Muammar Gaddafi's regime.
But the two rival branches have made progress over the past year toward full reunification, a key goal of international peace plans and a key demand on the agenda of the United Nations, which sponsors a political process in Libya.
And the Central Bank of Libya said in a statement Thursday January 20, 2022: The Governor of the Bank in Tripoli, Sadiq Al-Kabir, and his deputy, Ali Salem Al-Hibri, who heads the eastern branch in the city of Al-Bayda, signed an agreement on a four-stage plan for reunification, during their meeting in Tunisia, including Hiring an external consulting firm. The statement said that the four phases "will result in an advanced operating model for the unified central bank that emulates international best practices." The information office of the Central Bank of Libya in the east said: The two branches have unified their boards of directors, and they have started working in technical committees.
Al-Kabir had said last December, after a meeting with Al-Hibri, that he hoped to complete the first phase of reunification by next July.
The division of economic entities in Libya has compounded the commotion in the rich oil-exporting country, and has caused diverging exchange rates, lack of liquidity, and ballooning public debts, which have damaged the Libyan economy, which is exhausted by the long internal war.
The step of signing an agreement to unify the Central Bank of Libya comes after the completion of the international financial review process for the Central Bank last July. The English company, Deloitte, announced the completion of the audit of the accounts of the Central Bank of Libya with its two parts in Tripoli and Al-Bayda, which has been done under the supervision of the United Nations Mission.
At the time, the company’s report confirmed that “foreign exchange reserves in Libya have only decreased by 8% since December 2014.” The report also indicated that the overdraft facilities, coupled with the rapid printing of the dinar, caused pressure on the local currency exchange rate, which eventually led to the decline in the value of the Libyan dinar against the US dollar by more than 300% since the beginning of last 2021.
The United Nations bet that this regulatory process would be a first step to unify the Central Bank, which has been divided since 2014, which is beginning to appear today.
This step falls within the context of the United Nations-led efforts to reunify Libya and facilitate a transitional political process that will move the country from a state of conflict to a state of stability. However, efforts to resolve political differences in Libya are still subject to setback, with doubts over the fate of the interim national unity government, whose legitimacy was challenged by the Speaker of the House of Representatives two days ago, in conjunction with the continuation of negotiations between factions and leaders in the wake of a failed attempt last month to hold elections, and the lack of agreement on a new date for its conduct.
