Libya’s financial crisis at the hands of Al-Sarraj, Al-Kabir and Boumtari

After the governor of the Central Bank of Libya, Al-Siddiq Al-Kabir, was absent from following up on the internal affairs, he returned to the scene again by communicating with the Presidential Council and the Ministry of Finance, in the framework of organizing the monetary movement of the country, where the Head of the Presidential Council, Fayez Al-Sarraj, demanded the approval of the 2021 budget before the end of this year.

In a letter addressed to the Al-Sarraj, Al Kabir stressed the need to initiate consultations with the Central Bank to apply the fee imposed on foreign exchange sales for all purposes without any exceptions, in addition to determining the appropriate fee percentage that is in line with the current conditions, as well as providing the Central Bank with the total foreign exchange needs for the year 2021 for the two public sectors.

Al-Kabir responded to the letter of Finance Minister Faraj Boumtari, regarding the collection of the proceeds from the fees on foreign exchange sales in the payment of salaries of 146.000 employees referred by the Ministry of Finance.

In his letter, Al-Kabir stated that the revenue from the fees on foreign exchange sales until the end of 2020 are estimated at 16 billion dinars, of which 2.1 billion dinars have been allocated for Chapter Three of the budget, so the remainder for the current year will be 13.9 billion dinars, and the remainder for the years 2019-2018 is 7.6 billion dinars.

That is, the sum is a total of 21.5 billion dinars, which does not cover the value of the loan granted by the Central Bank of Libya during the year 2020 to be repaid, amounting to 26.7 billion dinars, with a deficit of about 5.15 billion dinars.

Al-Kabir pointed out that the balance of the public debt outstanding on the Ministry of Finance until the end of 2020 is about 84 billion dinars, calling for the approval of the settlement agreed upon in the meeting between the Central Bank work team and the Ministry of Finance.

All these correspondences and messages show the size of the rift and confusion among state institutions, and their inability to establish one unified meeting that addresses issues and discusses the problems that are affecting most sectors in Libya, and ways to solve them.

It has become clear that Libya is going through a monetary crisis that has caused scarcity of liquidity and high prices in addition to the lack of control of the central bank over monetary policy.


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