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Libya: Towards a liberalized economy

Governor of the Central Bank of Libya Ahmed Menesi talks to Kate Luxford about plans to prepare Libya's economy for a more competitive environment after privatization

How important is the country's new banking law, Law 1 of 2005?

This law gives the central bank more autonomy, which is very important, and the banking supervision will be better. The law allows Libyan banks to invest more, locally and abroad, and have more products, and more variety. There is no limit now. The law allows foreign banks to come in, legally, but not in practice yet. We are studying this, and we have people from the IMF to advise us about what benefits we should take from the activities of the foreign banks. [But] the new law gives the legal foundation to foreign banking. We don't have any preference for Arab banks – all can come in – because we want competition. But we don't have a timescale – maybe a year or two, maybe less. We want to prepare our local banks, or national banks, to compete. We have now a national payment system under way. This is a huge project, with real-time gross settlement, an automated clearing -house, automated cheque processing, ATMs and points of sale, credit cards, etc.

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