Libya may issue bonds says cbank
Abu Dhabi, March 1, 2013
The Libyan government may issue bonds in order to help banks in the country by giving them access to tradable financial instruments, Libya's central bank governor Saddek Omar Elkaber told Reuters on Thursday.
"We don't need to raise money through selling bonds but may issue sovereign bonds to boost investment banking and create a market," he said in an interview, without elaborating on when issues might begin.
Unlike other countries which went through Arab Spring uprisings, Libya is rich because of its oil reserves and accumulated oil earnings. Elkaber said the central bank's foreign reserves, including cash and liquid instruments, now totalled $160 billion.
He said the government had been focusing on improving security since the 2011 ouster of Muammar Gaddafi but was now working on regulating the banking industry.
"There's a plan to issue three licences for Islamic banks. Some conventional banks now have Islamic windows but there is a huge need for Islamic products. We're still in the brainstorming stage and will be ready soon."
The International Monetary Fund estimates Libya's economy shrank 60 percent in 2011 because of its civil war, but expanded 122 percent last year as oil output resumed.
"We expect economic growth between 16 and 18 percent in 2013, driven by a planned reactivation of various sectors, mainly in the transport, hydrocarbon and transportation sectors," Elkaber said, predicting inflation of around 7 percent this year.
Elkaber said the government was reviewing previously signed contracts worth $130 billion, including contracts for infrastructure construction, to check that they did not involve corruption or improprieties.
"We have to make sure they're approved and clean before we reactivate them," he said, without saying when that might happen. - Reuters