Libya’s banking system was functioning again following last month’s fall of the capital Tripoli in the uprising against Muammar Qaddafi, and the central bank had sent instructions to commercial banks to start issuing letters of credit to importers, Qassem Azoz said.
Currently, commercial banks in the country are run by steering committees under the supervision of the central bank.
“By year-end all commercial banks should have elected boards in place,” Azoz said.
Under Qaddafi, Libya built up an estimated $170 billion of assets abroad.
Only $16 billion has been unfrozen by the UN Security Council’s Libya sanctions committee so far.
“We started international transactions through unfrozen Libyan assets to meet the most urgent necessities of the country,” said Qassem Azoz, governor of the Central Bank of Libya.
“There are no controls on foreign transactions, they are just rationalized according to available liquidity and need,” Azoz said.
“The priority would be to provide foreign exchange required for treating those injured during the uprising,” he said, adding that the second priority was food supplies and drugs.
Azoz said that hundreds of millions of dollars in foreign assets would be available rather than billions and that Libya was committed to deals with foreign companies, though they would be reviewed if tainted by corruption.
Azoz said limits would remain in place for withdrawals from personal accounts to control the money supply. The current limit is 750 Libyan dinars ($610), up from 250 dinars when banks in Benghazi first resumed operations in late February.
“The only tools the central bank has to control inflation now are limits on withdrawals and allowing banks to issue letters of credit for importers,” Azoz said.
Asked about future central bank policies, Azoz said a committee would be formed to prepare for a national conference for Libyan bankers to evaluate the experience of the banking sector during Qaddafi era and set a vision for its future role.
Islamic banking would be one of the topics, he said.
