The Governor of the Central Bank of Libya has sent a letter to the head of the Government of National Unity, urgently calling for intervention to issue a decision prohibiting imports without bank transfers starting from the beginning of next January. He warned of catastrophic repercussions for the economy and citizens if the current situation continues.
Key Warnings and Details
- Unregulated Imports: The Governor explained that the growing phenomenon of imports without bank transfers supports the black market, opens the door for financing illegal activities, and drains state resources.
- Health and Economic Risks: He pointed out that these practices lead to the importation of goods that do not meet specifications, harming the health and security of citizens.
- International Relations: He warned that the continuation of this phenomenon will lead to the collapse of Libyan banks’ relationships with international financial institutions and increase the cost of foreign transactions, which will directly reflect on the prices of imported goods and services.
- Existing International Restrictions: He revealed that international financial institutions have already begun imposing restrictions on Libyan transfers, including the Federal Reserve Bank of New York, which has tightened procedures for dealing in dollars.
- FATF Assessment: He indicated that Libya will undergo a comprehensive assessment this year by the Financial Action Task Force (FATF), warning of its potential inclusion on black or gray lists, which would practically mean the imposition of an international financial blockade and increased costs of dealing abroad.
- Government Responsibility: He confirmed that he has addressed the Minister of Economy multiple times regarding this phenomenon, but the decisions that were issued were later canceled. He called for decisive intervention to avoid a comprehensive economic collapse.
Central Bank of Libya
The Central Bank of Libya is the country’s primary monetary authority, established in 1956 to issue currency and manage monetary policy. It has played a critical and often divisive role in Libya’s recent history, notably functioning as a unified financial institution throughout the post-2011 civil conflicts despite the country’s political fragmentation.
Government of National Unity
The Government of National Unity (GNU) is a term most notably associated with the post-apartheid transitional government in South Africa, formed in 1994 following the country’s first multiracial elections. Led by President Nelson Mandela, it was a coalition government that included the African National Congress, the National Party, and the Inkatha Freedom Party, aimed at fostering reconciliation and stability during the nation’s democratic transition.
Libya
Libya is a North African country with a rich history rooted in ancient civilizations like the Phoenicians and Romans, followed by centuries of Arab and Ottoman influence. In the modern era, it was an Italian colony before gaining independence in 1951, later becoming known for Muammar Gaddafi’s lengthy rule from 1969 until the 2011 revolution. The country is home to UNESCO World Heritage sites, such as the ancient Greek city of Cyrene and the Roman ruins of Leptis Magna.
Federal Reserve Bank of New York
The Federal Reserve Bank of New York is one of the twelve regional Reserve Banks in the Federal Reserve System and is considered the most influential due to its role in implementing monetary policy and overseeing financial markets. Established in 1914 following the Federal Reserve Act of 1913, its headquarters in Lower Manhattan houses the world’s largest gold vault, holding gold reserves for many central banks and international organizations.
Financial Action Task Force
The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 by the G7 to develop policies combating money laundering. Its mandate was expanded in 2001 to include efforts against terrorist financing, and it sets international standards that member countries are expected to implement.
