Libya Connects Its Banks to China's Payment System, Reducing Dependence on the US Dollar

Libya Connects Its Banks to China's Payment System, Reducing Dependence on the US Dollar

Libya has taken a significant step toward strengthening its financial ties with China by agreeing to connect its commercial banks to China's Cross-Border Interbank Payment System (CIPS). The move is expected to simplify international financial transactions while reducing reliance on the US dollar.

High-Level Meeting in Beijing

According to media reports, Libya's Central Bank Governor Naji Mohammed Issa met with People's Bank of China Governor Pan Gongsheng during an official visit to Beijing.

During the meeting, both sides reviewed bilateral trade and discussed ways to deepen economic cooperation. They also highlighted the importance of launching a new phase of strategic partnership between the two central banks.

Reviewed the current volume of trade between Libya and China.
Discussed ways to strengthen economic cooperation.
Emphasized a new stage of strategic partnership between the two central banks.
Agreed to connect Libyan commercial banks to China's Cross-Border Interbank Payment System (CIPS).

What Is CIPS?

The Cross-Border Interbank Payment System (CIPS) was launched by the People's Bank of China in 2015 to facilitate international financial transactions using the Chinese yuan.

The system is designed to:

Support cross-border payments in Chinese yuan.
Simplify international fund transfers.
Reduce dependence on the US dollar.
Improve payment settlement efficiency between participating banks.

Why the Agreement Matters

Connecting Libyan commercial banks to CIPS will provide direct access to China's international payment and settlement network. The agreement is expected to make financial transfers more efficient while strengthening trade and banking cooperation between the two countries.

Officials also discussed expanding collaboration between their central banks, viewing the agreement as the beginning of a stronger strategic financial partnership.

Conclusion

Libya's decision to link its commercial banks with China's CIPS represents an important step in enhancing bilateral financial cooperation. By facilitating smoother cross-border transactions and increasing the use of the Chinese yuan, the agreement is expected to strengthen trade relations while reducing reliance on the US dollar for international payments.