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Libya: Central Bank laments continuing economic crisis in Libya

The Central Bank of Libya (BCL) Thursday warned that the continuing crisis in the country, including the interruption of crude oil exports by armed groups, was negatively impacting on the economy of the north African country.

The Bank said the devastating effects on the economy had resulted in the deterioration of the security and political situation in the country.

In a letter to Parliament and the Government, the Bank reported the findings of a recent meeting in Tunisia with the International Monetary Fund (IMF), which underlined the continuing fears and doubts generated by the security and political situation in the North-African country and the unprecedented decline in oil and gas exports as well as the fall in production with less than 200,000 barrels per day representing only 15% of the production capacity.

This situation, according to BCL, has caused losses estimated at US$ 3.5 billion monthly and deficit of 40 billion Libyan dinars (about US$ 34 billion) for the year 2014.

According to BCL, the low level of reserves in foreign currency has brought about unnecessary speculations and security lapses targeting the banking sector.

Several robberies targeting the cash-transporting vans caused cash crisis in banks, resulting in the closure of some banks.

The takeover Wednesday of two major oil terminals which were controlled by secessionist armed groups in the eastern part of the country may help redress the chaotic situation, the Bank said, hoping for a quick resumption of oil exports in the coming days.

The Bank also urged the government to implement previous commitments for reforms in a bid to redress the oil sector, including organizing taxes, revision of the subsidy policy and the implementation of practical and systematic plan aimed at raising the Libyans’ awareness on the dangers caused by oil sector crisis.

The Bank reaffirmed its desire to keep the financial institution out of politics.


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