Libya starts distributing U.S Dollars to citizens through local commercial banks

Commercial banks across Libya have officially begun the physical distribution of U.S. dollars in cash to residents and foreigners alike.

But as an individual, you cannot get more than USD 2000 per transaction.

The move is being explained as a milestone in marking a significant development in the Central Bank of Libya (CBL) strategy to stabilize the national currency and ease liquidity pressures.

The disbursements are being handled based on the sequential priority of bookings made through the Libyan Central Bank’s electronic platform.

Local Banks have on the other hand been instructed to streamline procedures to ensure citizens can access their U.S dollar allocations that are currently capped at US$2,000 per person.

The Central Bank of Libya (CBL) released its weekly list of traders who received formal Letters of Credit for foreign currency access, totaling US$306 million for imports.

This substantial sum, legally funneled out weekly, underscores the concern about capital outflow in a country that is heavily reliant on imports, with an 85 percent import-based market.

This is particularly alarming given Libya’s extensive smuggling of oil and other resources, as recent incidents at Misrata International Airport illustrate.

Where culprits were caught smuggling 29 tons of Libyan gold & multi millions of foreign currency. 

Historically, Libya has remained unindustrialized despite its vast resources and a sequence of governing bodies from King Idris to Muammar Gaddafi and after, contrasting sharply with global trends over the past six decades.

Advocates argue that immediate industrialization is essential for reducing Libya’s heavy reliance on imports, which severely drain the economy.

Another significant issue noted in the CBL’s report is the uneven distribution of financial resources. Of the US$306 million allocated, almost only US$67 million, which is less than 25 percent is designated for the entire Eastern region, with the bulk going to just two cities: Misrata and Tripoli.

This disparity has fueled longstanding regional conflicts, originating even before King Idris’s reign, and has been a continual point of contention through various administrations, including Gaddafi’s centralized iron-fisted regime and all regimes that followed.

The inequitable resource distribution has been a catalyst for historical revolts, such as the major uprisings that began in Benghazi.

The current leader, Khalifa Haftar, appears to be addressing these imbalances with targeted developments in the Eastern region.

However, his efforts are critical, as failure may risk his position due to local dissatisfaction.

In a different development, a delegation from the Libyan Government of National Unity, recently visited the United States and while in Washington the team held meetings with officials from the United States Department of the Treasury.

The meeting was also attended by Deputy Assistant Secretary of the Treasury Eric Meyer, to discuss a number of priority financial and economic issues.

The U.S sessions addressed the Libyan and United States partnership regarding the implementation and sustainability of the unified national budget, as well as ways to enhance its efficiency in a manner that supports financial stability and improves public spending.

On the other hand, the chairman of the Libyan Investment Authority also reviewed the status of Libyan assets abroad, and the potential for developing cooperation with US partners and financial institutions to increase returns and improve the management and investment of sovereign assets.

The Libyan delegation to the United States included Minister of Transport Mohammed Al-Shahoubi, Minister of Oil and Gas Khalifa Rajab Abdul Sadiq and the Minister of Economy and Trade Suhail Boushiha.

Others were the head of the executive team for presidential initiatives and strategic projects Mustafa Al-Manea, the Director General of the National Mining Corporation Faraj Al-Shandouli, and the Chairman of the Libyan Investment Authority Ali Mahmoud.

Meanwhile, the Chairman of the Libyan Investment Authority, Ali Mahmoud, discussed with US Assistant Secretary of the Treasury Eric Meyer mechanisms for implementing the UN Security Council resolution allowing the reinvestment of Libya’s frozen assets.

In a statement issued Saturday, the Authority said the meeting with the US Assistant Secretary for the Middle East and North Africa comes within the framework of strengthening cooperation and coordination on issues of mutual interest.

 The meeting addressed how to implement UN Security Council Resolution No. (2819) of 2026, with a focus on practical mechanisms to activate it, allowing the use of uninvested cash assets within the scope permitted by the resolution, in a way that contributes to protecting the Authority’s assets and preserving their value, according to the statement.