Libya Joins China's Payment System to Reduce US Dollar Dependence

Istanbul (ANTARA) - The Governor of Libya’s Central Bank, Naji Mohammed Issa, and the Governor of the People’s Bank of China, Pan Gongsheng, agreed on Saturday (18 July) to connect Libyan commercial banks to China’s payment and settlement system.

In a statement on its website, the Central Bank of Libya said that Issa, who is visiting Beijing, met with the Governor of the People’s Bank of China on Friday (17 July).

They reviewed trade volumes between the two countries and discussed ways to strengthen and increase their growth rate.

“The importance of launching a new phase of a true strategic partnership between the two central banks was discussed. It was agreed to connect Libyan commercial banks to China’s Cross-border Interbank Payment System, CIPS, which will simplify financial transfers and make them easier to carry out,” the statement said.

CIPS was launched by the People’s Bank of China in 2015 to facilitate international transfers using the Chinese yuan.

The system serves as infrastructure that enables banks to send and receive payments in yuan directly, reducing dependence on the US dollar by eliminating the need to process transactions through intermediary banks.

The statement added that both parties also agreed to address existing obstacles and facilitate trade procedures in a way that would increase trade volumes between the two countries.

These activities will begin with the implementation of direct money transfers to China, making transactions easier for small-scale traders.

Both parties also agreed to allow letters of credit to be opened directly through Chinese banks, according to the statement.

They also agreed to arrange a visit by an official Libyan banking delegation to Beijing, led by the Central Bank Governor and accompanied by the directors of Libyan commercial banks, to meet with their Chinese counterparts as soon as possible.

The statement noted that the planned visit aims to build cooperation between commercial banks in both countries and to benefit from China’s experience in electronic payments and direct financial transfers.

It was further added that these measures will help reduce dependence on the informal market, ensure compliance with anti-money laundering and counter-terrorism financing standards, and enhance the reputation of Libya’s banking sector.

Source: Anadolu