Ayub Al-Farsi is an economics professor at Benghazi University. He warned that the Libyan Central Bank’s monetary policy faces pressure. This pressure stems from excessive government spending. He also highlighted a lack of spending control. Spending is not aligned with achieved revenues.
In exclusive statements to “Erem News,” Al-Farsi explained the Central Bank’s past measures. In prior years, facing deficits, the bank sometimes devalued the currency. At other times, it withdrew from reserves.
Al-Farsi noted preparations for 2026. The Central Bank has initiated an agreement. It is between the House of Representatives and the High Council of State. This agreement aims to unify the development item. It also unifies the development budget. This prevents a significant increase in this item’s size. Such an increase could exceed the Central Bank’s coverage capacity. It also seeks to avoid forcing the bank to devalue the currency. Furthermore, it prevents withdrawing large amounts from reserves.
Al-Farsi identified the current deficit in oil and foreign currency revenues. He noted this deficit occurred this year and in previous years. He views this as a “wake-up call” for governments. They must diversify the Libyan economy. He stressed that governments have not fulfilled this requirement. This is due to divisions hindering strategy formulation.
Al-Farsi believes the Central Bank alone is not responsible for economic stability in 2026. He urged governments, along with monetary and economic policies, to play their part. They must control available tools next year. This could mitigate the impact of future fluctuations in the energy sector and revenues.