Libya's primary monetary institution plans to shut down.
Sure, here's a different take on the original text:
The power tussle between Libya's two warring administrations sees the central bank playing a pivotal role in maintaining peace. It handles crucial tasks like managing oil export revenues. The bank's temporary shutdown is a cause for concern.
The central bank in Libya has temporarily halted operations following the kidnapping of an employee. The IT director of the bank was reportedly nabbed by unidentified individuals, leading to the suspension of operations. Other employees have reportedly received threats as well. The bank's services and operations across all departments will remain halted until the safe release of their IT head. This pause in operations also affects the financial hub for transactions from the state's oil business.
This latest development further aggravates the ongoing power struggle between the two opposing governments in the country. For years, Libya has been embroiled in a power tussle over influence and resources between two powerful factions, one led by Prime Minister Abdel Hamid Dbaiba in the west and the other by Field Marshal Khalifa Haftar and his sons in the east. Both factions run parallel governments.
The central bank receives deposits from the oil and gas sector, which contributes about 95% to the state's total revenue. The bank is responsible for various tasks, including salaries payment, even in the eastern regions. It is considered the most sought-after prize for the fighting groups in Libya, owing to its massive foreign exchange reserves worth billions and its role as the pulsating heart of Libya's oil-driven economy, according to Wolfram Lacher, an expert from the German Institute for International and Security Affairs (SWP). The International Monetary Fund estimates the Libyan central bank's reserves to be almost $90 billion.
The conflict in Libya is also intensified by external powers vying for influence in the oil-rich state. Haftar is primarily backed by Russia, while the Dbaiba government has Turkey's support. Turkey played a significant role in preventing an offensive by Haftar's self-proclaimed Libyan National Army (LNA) on Tripoli in 2020. Since then, the country has been effectively divided, with no major conflicts reported since the summer of 2020. However, recent indicators suggest a buildup of weapons, raising concerns about the possibility of a new phase of intense battles.
The temporary shutdown of the central bank is affecting Libya's oil-driven economy significantly, as it handles the majority of the state's revenue. The ongoing power struggle between the two factions further complicates the situation, as both sides view the bank as a valuable prize due to its vast foreign exchange reserves.
