Doha, August 23 (QNA) - The reunification of Central Bank of Libya (CBL) revived hopes to overcome the repercussions of nearly a decade of political, economic and institutional split, which left negative impacts on the local currency value and the country's monetary policies, according to commentators.

Speaking to Qatar News Agency on Wednesday, business experts and academics said the move would boost the national currency value against the basket of major global currencies, curb the increasing inflation rates, enhance money supply and contribute to the political settlement path.

The announcement of reunification came following a meeting between CBL Governor Sadiq Al Kabir in Tripoli and his deputy in eastern province of Beni Ghazi Marai Rahil. The meeting also included several CBL directors and advisors.

The Libyan Dinar has repeatedly lost a lot of its value since the 2011 revolution that overthrew the Ghaddafi regime.

Qatari economist Fawaz Al Hajri hailed the announcement as a victory for the Libyan economy, which has suffered as a result of internal divisions and external interference, stressing the CBL's significance for the country's monetary policies.

The decision will positively affect the Libyan currency, bolster its national economy and political stability and relations with the world, and increase foreign capital flow, Al Hajri said, highlighting the country's abundant resources.

Qatari economist Abdullah Al Khater said the move would place all financial transfers under one umbrella, legislation and monetary policy, which gives CBL the power to monitor the legality of financial transfers, and the movement of cash circulation across the country.

He hailed the move as a main step that gives confidence in Libyan institutions and helps to develop perceptions that are in line with the next phase requirements.

As for Qatari businessman, Chairman of the Qatar Pharmaceutical Industries Company Mansour bin Sultan Al Mansoor Al Nuaimi, he outlined during his statement to the Qatar News Agency (QNA) the significant economic transformation that the decision will bring about in Libya's economic growth. Specifically, this will impact the national currency exchange rate, influencing both the Libyan economy and monetary policies together.

On the other hand, Ahmed Akl, a Lebanese writer and economic expert, regarded the announcement as timely considering the substantial challenges faced by central banks and global economies due to the continuous interest rate hikes by the US Federal Reserve.

The unification of monetary policies, he affirmed, is highly positive and a crucial step for Libya's economic sector, aiming to achieve financial stability. Akl emphasized that central banks across the world play a pivotal role in safeguarding national currency exchange rates, harmonizing exchange processes, and overseeing financial institutions and banks.

He pointed out that when central management is unified, the decisions and regulations become more effective. Having a single central bank for a single nation is better than having multiple ones, as diverse opinions can lead to divergent policy implementations.

He pointed out as an example that within the US Federal Reserve, some individuals advocate for a stricter monetary policy, whereas others express disagreement. This diversity results in differences in how financial policies are put into practice. On the flip side, when there is a single and coherent monetary authority, the execution of these policies becomes more efficient, leading to better results.

This merging process contributes to enhancing the status of the Libyan dinar and the guidelines for trade, fostering economic expansion, and boosting local manufacturing due to the nation's inherent resources. The unification process also aids in achieving a clearer comprehension of alterations in interest rates, the issuance of bonds, control of inflation, and maintaining price stability. Algerian economic writer and expert Murad Kawashi echoed the sentiment, emphasizing that the reunification of the Libyan Central Bank is a step toward consolidating economic efforts in a nation ravaged by war and hardship.

The announcement serves as a roadmap towards stability on both political and economic fronts. It is expected to address the divisions among factions, streamline monetary transactions, attract investors, and facilitate the implementation of reforms, ultimately expediting financial sustainability.

Regarding economic prospects and future expectations for economic growth, Kawashi noted that making predictions is challenging in the presence of political instability and absent security, which is pivotal for growth. Libya continues to grapple with security issues, deterring investors from engaging within the country.

In terms of the impact of the announcement on monetary policies, the Algerian economic expert stated that the initiative contributes to establishing a unified policy applicable across all Libyan territories.

He stressed that while the decision is essentially an economic step, it is fundamentally a political challenge. All stakeholders should prioritize national interest and address issues through dialogue to surpass the crisis effects that have harmed the nation and its resources. Political resolution and unity of power are required, paving the way for subsequent economic solutions.

Dr. Omar Khalif Al Gharaibeh, an associate professor in investment risk management at Al Al-Bayt University in Jordan, regarded the announcement as a roadmap toward achieving stability on all political and economic levels. It has the potential to mitigate the impacts of factional divisions, ease monetary transactions, attract investors, and facilitate reform implementations.

Strengthening the Libyan dinar is expected to reduce inflation rates, as individuals gain enhanced purchasing power for goods and services at lower costs. This, in turn, boosts Libya's oil exports, reduces import costs, and moves towards achieving trade balance.

Moreover, it supports various sectors through lowered costs of imported raw materials, increases employment rates, and reduces unemployment, which exceeded 20 percent in 2022.

He added that the dinar's strength would reduce debt repayment costs, particularly with anticipated growth rates. Success requires collective efforts, strong commitment among all parties based on political consensus, alongside governance implementation and institutional coordination.

He emphasized Libya's dire need for international support, whether in the form of technical or financial assistance, to build capacities and enhance financial and banking structures, or in terms of military support to boost security and stability.

It's worth noting that the Libyan Central Bank split into two entities in 2014; one in Tripoli led by Siddiq Omar Al-Kabir with international recognition, and another in the east under Ali Al Hibri's leadership, who was subsequently replaced by Muraikhi Miftah Rahil after being dismissed from the House of Representatives. (QNA)