Newsletters
Libya's central bank announced Saturday that its governor reached an agreement with his Chinese counterpart in Beijing to integrate Libyan commercial banks into China's cross-border payment infrastructure, a move both sides framed as the start of a deeper financial partnership.
Central Bank of Libya Governor Naji Mohammed Issa met with People's Bank of China Governor Pan Gongsheng on Friday during a visit to Beijing.
The two sides reviewed existing trade volumes and discussed ways to accelerate growth, according to a statement published on the Libyan central bank's website.
The centerpiece of the agreement is Libya's planned accession to the Cross-Border Interbank Payment System, known as CIPS, a yuan-denominated settlement network launched by the People's Bank of China in 2015.
The system allows banks to send and receive payments directly in Chinese yuan, bypassing the need for dollar-based intermediary transactions, a structure that has historically shaped the bulk of global trade finance.
The statement said both governors agreed on "the importance of launching a new phase of genuine strategic partnership between the two central banks" and that connecting Libyan banks to CIPS "will simplify financial transfers and make them easier to conduct."
Beyond the headline infrastructure deal, the two sides agreed on several measures aimed at streamlining day-to-day commercial activity.
These include enabling direct money transfers to China as an initial implementation step, with an explicit focus on reducing friction for small-scale traders who have long navigated a cumbersome and often informal financial corridor.
The agreement also provides for letters of credit to be opened directly through Chinese banks, a significant operational change that could reduce costs and processing delays for Libyan importers relying on Chinese goods.
Libyan officials said the measures are also intended to curb reliance on the informal currency market, bring transactions into compliance with anti-money laundering and counter-terrorism financing standards, and improve the overall reputation of Libya's banking sector, areas where the country has faced longstanding scrutiny from international financial institutions.
To advance implementation, both sides agreed to arrange a visit to Beijing by an official Libyan banking delegation, to be led by the Central Bank governor and accompanied by the directors of Libyan commercial banks.
The delegation will meet with Chinese bank counterparts "at the earliest possible opportunity," according to the statement.
The planned visit is intended to lay the groundwork for direct cooperation between commercial banks in the two countries and to allow Libyan institutions to study China's experience in electronic payments and direct financial transfers, fields in which Beijing has invested heavily over the past decade.
The deal marks a notable step in Libya's engagement with China's broader effort to expand the international use of the yuan.
CIPS, which operates as an alternative to the dominant SWIFT network for yuan-denominated transactions, has steadily expanded its reach across Africa, the Middle East and Asia in recent years.
Libya's accession would add a North African petro-economy to that network, though the practical scale of flows will depend on implementation timelines both sides have yet to publicly specify.
The agreement comes as Libyan authorities have sought to modernize a banking sector that remains fragmented and heavily cash-dependent, a legacy of years of political instability following the 2011 collapse of Muammar Gaddafi's government.
Set as preferred source
Set as preferred source
1 min read
1 min read
