Amid crisis, Libya plans to raise interest rate
Libya is suffering an economic depression from the recent crisis, and there are fears of liquidity problems if the political crisis is not resolved. Libya's Finance Minister said that the government is going to double the interest rates to encourage citizens to put their money in banks rather than stored in houses. The decision to raise interest rates is an emergency procedure taken by the Government in recent weeks following the austerity to regulate the use of fuel and prevent citizens to withdraw money from their savings. 75 percent of the population lives in the west of the country where people still receive their salaries, pensions and government assistance despite the international blockade. The minister said that the government currently does not suffer from the problem of paying salaries and pensions, although the bills are expensive.
Since the beginning of the crisis, a large proportion of the population purchased stored food reserves which affected 50 percent of consumption goods. The majority of foreign workers, estimated by 2 million, left the country. The minister said that if the people realize that their money is safe in banks as they receive high benefits, their confidence will increase. The government has restricted the withdrawal of money to one thousand dinars based on the cost necessary for one month expense, and encourages people to buy gold, which the government recommends as the best of the securities.
With regard to Libyan investments, Libya has acquired 2.64% of the total value of the Jordan Stock Exchange with a total value of approximately $ 700 million; with 100 shareholders own more than 82 million securities. The contribution of the Libyan Foreign Bank amounts to 15.94% of the Housing Bank capital, in addition to a 4.545% of the Jordan’s Bank capital amounting to 110 million shares.
Libyan Foreign Bank owns 12.79% of the capital of the Arab-Jordan Investment Bank with an amount of 100 million shares, and the Libyans have about 73.24 million securities at the end of last year distributed over 99 contributor. The contribution value of the Libyans in the market was up to 542.1 million dinars or a rate of 2.45% of the total market value by the end of last year.
Observers question the future of foreign and Arab investments in Libya and the impact on economies associated with Libya in light of political turmoil that the country faces, especially after the emergence of the Lybian sovereign wealth fund, which fortune is estimated at about $ 80 billion, after acquiring shares in banks and international companies. Source: yallafinance.com.