Libya: Factions agree to appoint a central bank governor

CAIRO: The legislative bodies representing two warring regions in Libya agreed on Tuesday to appoint jointly a central bank governor, potentially defusing a battle for control of the country’s oil revenue that has slashed production.

The House of Representatives in Benghazi, which represents the country’s east, and the High State Council in Tripoli in the west signed a joint statement after two days of talks hosted by the UN Support Mission in Libya.

Read more: UN hosts talks to resolve Libya’s central bank crisis

They agreed to appoint a central bank governor and board of directors within 30 days in Libya. The country’s central bank is the sole legal repository for Libyan oil revenue, and it pays state salaries across the country.

The eastern and western factions also agreed to extend consultations for five days, concluding on Sept. 9.

The standoff began when western factions, whose governing bodies are internationally recognised, moved last month to oust veteran central bank Governor Sadiq al-Kabir and replace him with a rival board.

This prompted eastern factions to declare a shutdown to all oil production. The dispute threatened to end four years of relative stability.

Some oil output has since resumed, and oil prices dropped nearly 5 per cent on Tuesday to their lowest levels in almost nine months in a sign that traders expect the latest agreement to get more oil flowing.

Libya’s central bank has been paralysed by the battle for its control, leaving it unable to conduct transactions for more than a week. Underlying the issue is the country’s fractured political landscape of rival governing institutions with tenuous claims to legitimacy.

Read more: Libya’s oil output falls more than half due to political standoff

A 2011 NATO-backed uprising plunged the country into chaos. West and east Libya split in 2014.