Libyan Factions Reach Agreement to Appoint Central Bank Governor, Easing Oil Crisis

This agreement, reached after two days of UN-facilitated talks, aims to end a power struggle that has crippled the North African country’s oil production and jeopardized financial stability.

In a significant step toward resolving the ongoing political and economic turmoil, Libya’s two legislative bodies, the House of Representatives and the High State Council, have agreed to jointly appoint a new central bank governor.

The agreement, signed on Tuesday, calls for the appointment of a governor and board of directors within the next 30 days.

The central bank, the sole custodian of Libya’s oil revenue and responsible for paying state salaries, has been paralyzed by the ongoing dispute.The conflict began when the head of the Presidency Council in Tripoli attempted to remove the veteran central bank governor Sadiq al-Kabir and install a rival board. In response, eastern factions shut down oil production, demanding the reversal of Kabir’s dismissal.

While some oil production has since resumed, the recent agreement is expected to significantly boost output, with oil prices dropping nearly 5% on Tuesday, their lowest level in almost nine months, according to media reports.

The agreement also includes a five-day extension of consultations, ending on September 9. This additional dialogue period allows for further discussions on key issues, including the selection of the new governor and board members.UN mediates talks in Libya to end oil blockade amid central bank crisis

The United Nations Support Mission in Libya reported to have mediated talks in Tripoli on Monday to address a central bank crisis that led to a shutdown of Libya’s oil production, putting the country’s economy at risk.

The UN mission reported that participants in the talks had reached significant understandings on how to resolve the central bank crisis, restoring confidence among Libyans and international partners in this vital institution. Consultations are scheduled to conclude today, with the aim of finalizing a formal agreement.

The standoff began when Western factions replaced the veteran central bank governor with a rival board, prompting Eastern factions to halt oil exports.

Libya remains fractured, with two rival governments vying for control: the Government of National Unity in Tripoli in the west and the House of Representatives in Tobruk, backed by the Libyan National Army in the east.