The Prime Minister of the Government of National Unity, Abdul Hamid Dbeibah, addressed a letter to the Governor of the Central Bank of Libya, Naji Issa, expressing his observations regarding the data contained in the bank's report on revenues and expenditures for January and February 2025.
Dbeibah pointed to the bank's data, which showed a general budget surplus for the two months of 9.6 billion Libyan dinars. However, the Central Bank's report did not include data related to revenues from the 4.4 billion dinar fee imposed on the sale of foreign currency, which constitutes part of the state's general revenue. Accordingly, the budget surplus for that period reached 14 billion dinars, according to a post on the government media center's Facebook page.
Regarding foreign currency revenues, total revenues during that period amounted to $3.6 billion, while total uses and outstanding obligations in foreign currency amounted to $6.1 billion, distributed between uses amounting to $581.6 million through the Central Bank of Libya and $5.537 billion through commercial banks.
Dbeibah said that the link between the increase in demand for foreign currency and public spending is part of the truth, but not the whole truth. He demonstrated this by stating that the report indicated that foreign currency revenues amounted to $3.6 billion, while public spending did not exceed $1.5 billion, representing a surplus of $2.1 billion.
He also pointed to the continued emergence of a transitional trade deficit in the state's trade balance, estimated at approximately $2.5 billion over the two months, which is directly linked to money creation in the economy.
Dbeibah indicated that the marked increase in demand for foreign currency during the last quarter of 2024 and the months of January and February (2025) at unprecedented rates raises questions that require further disclosure of the sources of funds associated with the demand for foreign currency, in accordance with the requirements of Law No. (2) of 2005 on Combating Money Laundering and its Executive Regulations.
He explained that focusing on public spending to control demand for foreign currency has not and will not lead to any solutions to stabilize the trade balance. He considered this to represent a small part of the problem, not the main one, which lies within the banking system, especially with the continued rise in commercial banks' deposit liabilities that are directly linked to money creation.
Dbeibah concluded his letter to the Central Bank Governor by saying that the country is going through a critical phase that requires a serious stance to address these issues. He called for the necessary measures to address these issues, ensuring full transparency in financial data related to foreign currency, and submitting a regular and periodic statement of the assets and liabilities of the Central Bank of Libya, at the end of the last day of each month, directly to the Cabinet Council, in implementation of the provisions of the Banking Law.
