afrol News, 23 July - The Libyan government has notified the International Monetary Fund (IMF) that it has accepted IMF standards on international money transactions as one of the world's last countries. Libya presently seeks to increase confidence among international investors.

According to a press release by the IMF, the Libyan government has now accepted the obligations of the IMF's Article VIII, meaning that it will no longer place discriminatory restrictions on making payments and transfers for current international transactions.

Libya had joined the Fund in September 1958. When joining the IMF, Libya as other members had to undertake to refrain from imposing new restrictions on the making of payments and transfers for current international transactions, and from engaging in discriminatory currency arrangements or multiple currency practices, without IMF approval.

However, restrictions on making payments and transfers for current international transactions that exist before a member joins the IMF can be maintained under transitional provisions in Article XIV of the IMF Articles of Agreement. When a member accepts the obligations of Article VIII it effectively signals an intention to no longer avail itself of the transitional provisions of Article XIV.


- By accepting the obligations of Article VIII, Libya gives confidence to the international community that it will pursue economic policies that will make restrictions on the making of payments and transfers for current international transactions unnecessary, and will contribute to a multilateral payments system free of restrictions, the IMF said in its statement.

Libya is currently trying to improve its bad international reputation by renouncing its terrorist past and paying compensation to the victims of these terrorist acts. The Tripolis government has observed the high price it has had to pay for its international isolation and is now seeking to find new international investors.

The Libyan concession to the IMF has come out of Libyan considerations and not due to pressure from the Fund. Libya has no outstanding use of IMF financing. On the contrary, Tripoli in a net contributor to the Fund.

The adaptation to the IMF's Article VIII therefore seems to be based on a Libyan desire to attract international investments by playing by international money transactions rules. US companies are still forbidden to invest in Libya (by the US government), while European companies have found the Libyan oil industry an increasingly interesting investment object.

By staff writer

© afrol News

Related pages and feature

Current afrol News Top Stories