Washington, Aug 29: The US and UN are urging immediate diplomatic talks to resolve a severe crisis involving Libya’s central bank, which has led to heightened economic instability and violence. The US Embassy in Libya, led by Ambassador Richard Norland, has called for all parties to heed the UN’s plea for negotiations, stressing that the ongoing conflict undermines both domestic and international confidence in Libya’s financial stability. The embassy also condemned reports of arbitrary arrests and intimidation of bank employees, demanding accountability for those responsible.
The dispute centers on the recent dismissal of Sadiq al-Kabir, the central bank’s governor for the past 20 years, by the UN-backed western Libyan institutions led by Abdul Hamid Dbeibah. Kabir’s removal has been met with resistance from the eastern-based administration, which has suspended oil production and exports in protest. The new interim deputy governor, Abdel Fattah Ghaffar, has promised to address the liquidity crisis and ensure timely salary payments but faces significant operational challenges, including the need for Kabir to relinquish crucial access codes.
Libya’s political landscape remains fractured, with ongoing disputes over state resources and the postponement of national elections since 2014. The Presidential Council, aligned with Dbeibah, has defended the dismissal of Kabir as necessary for upholding the rule of law, but this move has deepened political divisions. The international community, including the UK and IMF, has criticized the unilateral nature of Kabirās removal, emphasizing the need for solutions that stabilize Libya’s financial situation and adhere to legal norms.