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Libyan PM attacks central bank governor as political turmoil rages

Source: Reuters - Mon, 28 Apr 2014 16:22 GMT
Author: Reuters
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* Political infighting, chaos paralyse decision-making in Libya

* Central bank has so far avoided the turmoil

* Central bank wants to curb spending to keep reserves

TRIPOLI, April 28 (Reuters) - Libyan Prime Minister Abdullah al-Thinni accused the central bank governor on Monday of obstructing the government and exceeding his powers, in comments that may damage one of the last respected state institutions in the North African country.

Libya's weak central government is struggling to assert its authority against rival militias who helped oust dictator Muammar Gaddafi in a 2011 uprising but kept their guns and carved out autonomous fiefdoms, hitting vital oil exports.

Thinni's criticism of governor Saddek Omar Elkaber also highlights Libya's dire economic plight as the central bank struggles to curb government spending and protect its reserves from the sharp decline in oil revenues.

Thinni told al-Nabaa television station that Elkaber was withholding payments for approved spending.

"He (Elkaber) acts like the ruler of Libya and does what he wants," Thinni said in the interview, broadcast late on Monday. "The central bank governor is overstepping his competences."

Elkaber rejected the criticism and called on parliament to schedule a hearing to allow him to defend himself, a bank official quoted him as saying.

"The central bank plays an important role in building up a state of law and fighting corruption," the official said.

The government has been relying on the central bank to use loans and its reserves to cover a growing budget deficit after rebels shut down ports and oilfields.

The central bank has repeatedly urged the government to find a political solution for the closures blocking oil exports to avoid using up its dollar reserves. It also wants the government and parliament to overhaul a system of subsidies for everything from bread to petrol that eats up a third of the budget.

Thinni handed his resignation on April 13, just one month into the job, after he said gunmen had attacked his house and family but he agreed to stay on until parliament finds a successor. (Reporting by Feras Bosalum and Ulf Laessing; Editing by Gareth Jones)

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