During yesterday’s TV interview for the Libyan WTV channel, Finance Minister Faraj Bumtari claimed that Tripoli Central Bank (CBL) opposed his government’s economic reform policies and did not control foreign currency in the market.
Bumtari also stressed that corruption will grow in Libya when there is an active black market, pointing out that the rise in the dollar against the dinar indicates that there is a problem with liquidity, and a lack of foreign exchange control by the CBL, emphasizing the need for the CBL to control the flow of the dollar (in the black-market) and not in a random way.
The dollar is not a food commodity, and we must coordinate together by reference to the banking law, the policy of the government seeks to get rid of the smuggling and laundering of money, and to remedy inflation, which requires adjustment of the exchange rate, but the CBL did not respond to us, and there was a problem in opening direct remittances to small traders, which damaged the Ministry of Finance and reduced its revenues.”
The implication is that the CBL is either encouraging or turning a blind eye to the hard currency black-market which is causing hardship to consumers through inflated prices and a reduction in spending power and standards of living. There is a common perception in Libya that the black-market traders are in bed with CBL / commercial bank staff.
He pointed out that in 2019, US$10 billion was available to Libyan citizens on the black-market, adding: “This was an opportunity for corruption, because it is money without monetary control, which confirms the spread of corruption.”
He also noted that neighbouring countries such as Egypt and Tunisia do not have this amount of financial corruption because there is “strict” financial control over cash, which reduces the rates of corruption, “the situation in Libya is different, and those who get money illegally can move it to another country.”
Bumtari also mentioned that the Libyan economy has been suffering since the February 2011 revolution, especially with the decline of Libya’s oil production capacity, and low international oil prices. ‘‘This required reform of monetary policy and adjustment of the exchange rate and solving the liquidity problem, but the CBL opposed the changing the Libyan dinar’s exchange rate, and there was an unjustified fear of this move by the CBL.”