Tough monetary files facing Central Bank management
LIBYA – Economic researcher Khaled Bouzaakouk has said that controlling public spending, curbing inflation, improving the dinar’s purchasing power and preserving foreign-currency and gold reserves are among the main files awaiting Fawzi Abukhzam, the new Governor of the Central Bank of Libya.
Criticism of the former governor’s management and banking oversight
In exclusive remarks to Sputnik, Bouzaakouk said that, in his assessment, the main reasons for replacing former governor Naji Issa were mismanagement, the absence of a clear monetary policy and confusion in the bank’s administration. He argued that earlier statements had not reflected actual performance, which hurt the value of the dinar.
He accused the previous administration of weak oversight of banks, pointing to what he described as rising cases of embezzlement, manipulation of financial data and encroachment on bank balances, in some cases reaching hundreds of millions — accusations and estimates that are his own.
Why international recognition of the governor’s signature matters
He explained that the governor’s post is tied to the accreditation of his signature with the International Monetary Fund, the World Bank and major international financial institutions. An administrative vacuum or a challenge to the governor’s legitimacy could, in his view, lead to frozen transactions and delays in opening letters of credit, with knock-on effects on the exchange rate and the financial system.
Abukhzam’s swearing-in before the House of Representatives had, in his assessment, overcome this problem and given him domestic and international legitimacy that could support the exchange rate and help address the liquidity crisis, he said.
A unified budget and oversight of letters of credit
Bouzaakouk called for rationalised spending and the adoption of a unified budget funded without a deficit, as well as tighter oversight of letters of credit, which he described as one of the main channels of corruption and waste of foreign currency.
He stressed the need to bring down inflation, restore the dinar’s purchasing power, which has declined in recent years, and safeguard the public reserve of foreign currency and gold to strengthen monetary and financial stability.
