The Central Bank of Libya and the People's Bank of China have agreed on the inclusion of Libyan banks in the Cross-Border Interbank Payments System (CIPS).
The move aims to facilitate trade and financial transactions between Libya and China, along with an agreement to allow Libyan investments into the Chinese bond market and launch a joint banking forum in early 2027.
The agreement was reached during a meeting between the Governor of the Central Bank of Libya, Naji Issa, and the Governor of the People's Bank of China, Pan Gongsheng, in Beijing. The two sides discussed ways to enhance banking and financial cooperation and benefit from China's experience in developing the financial sector's infrastructure, digital payment systems, and modern financial technologies.
The Central Bank of Libya explained that joining the CIPS system will facilitate payment and transfer operations between the two countries, improve the efficiency of financial transactions, enhance trade flow, and support the business community. The two sides also agreed to diversify Libyan investments by entering the Chinese bond market, as part of the bank's strategy to diversify its investment portfolio and manage its reserves.
Furthermore, they announced an agreement to launch the first Libyan-Chinese Banking Forum on the sidelines of the China-Africa Forum in early 2027, with the aim of strengthening investment partnerships and expanding cooperation between financial institutions in both countries.
For his part, economist Abu Bakr Al-Tour considered Libya's joining the Chinese payment system and using the yuan in part of trade transactions as a step towards reducing dependence on the US dollar, noting that this will allow the import of goods from China directly in yuan, and will help diversify foreign exchange reserves and reduce the risks of exchange rate fluctuations. He stressed that the implementation of the agreement will include all Libyan banks through the Central Bank of Libya, and that he does not expect American pressure on this step given the limited volume of trade between Libya and China.
