Khalid Al-Habbawi is an economics professor at Omar Al-Mukhtar University. He stated that Certificates of Deposit, or Mudharabah certificates, are essentially an investment tool. However, they also represent a monetary policy instrument. The Central Bank of Libya recently activated this instrument.
Al-Habbawi explained this in exclusive statements to the Al-Ain Al-Akhbariya website. The primary goal of issuing these certificates is not solely to achieve profits. It primarily aims to curb inflation. It also works towards stabilizing the Libyan dinar. Furthermore, it seeks to preserve the dinar’s value. Another objective is to regulate liquidity within the banking market.
He indicated that this mechanism allows the Central Bank to invest commercial banks’ funds. The Central Bank receives 0.25% of the profits. Commercial banks receive the remaining 99.75%. This operates within a partnership based on the Mudharabah principle (profit-sharing).
Al-Habbawi added that these certificates help utilize idle liquidity within commercial banks. This prevents funds from remaining uninvested. It supports the national economy. It also reduces the need to print more currency. This is a crucial step to avoid inflationary pressures.
He also noted that estimated returns range between 5.5% and 7.5%. This provides an additional incentive for banks to participate in these instruments. The Central Bank of Libya began issuing them sequentially since the end of 2025. These issuances are part of a package of measures. The measures aim to restore monetary balance.