Libya Spends $7bn to Cover Lost Oil Revenue

The Deputy Governor of Libya's Central Bank, Ali Mohamed Salem, has told Reuters that Libya has spent $7 billion of its foreign currency reserves to offset the impact of oil strikes, and will have to spend up to $6 billion more this month to keep the country running.

If the situation continues, he said the central bank will restrict access to dollars next year, and may consider a devaluation of the Libyan dinar.

He warned that the 'cushion' of $119 billion in reserves could be eroded rapidly, and said the economy is expected to shrink by 5 percent next year if protests continue.

Oil is not only the main source for the budget but also accounts for 97 percent of the inflow of hard currency needed to pay for imports.

Oil revenues of just 63 billion Libyan dinars ($51 billion) are expected this year year, a 10 percent shortfall from the budget of 70 billion dinars.

(Source: Reuters)

(Picture: Board of Directors of Central Bank of Libya)

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