Libya central bank proposes Islamic bonds to offset loss of oil revenues

Reuters, Wednesday 25 Jun 2014

Libya's central bank is proposing issuing Islamic bonds to help fund the budget and offset a loss of oil revenues which could create a deficit of $25 billion this year, the bank's spokesman said.

The North African country is struggling with a budget crisis as a wave of protests at oilfields and exports ports has reduced production to less than 300,000 barrels a day, down from 1.4 million barrels a day in July when strikes started.

Parliament approved a $47 billion budget on Sunday but a central bank official said Libya would risk a budget deficit of 30 billion Libyan dinars ($25 billion) if this was implemented.

"We proposed to the central bank to create new funding sources for the budget such as Islamic bonds so we can use the liquidity of commercial banks," Musbah Alkari, director of the central bank's reserves department, told Reuters in an interview.

Alkari is also the bank's spokesman.

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