Evaluation of the Performance of Monetary Policy in Libya During the Period (2002-2023) AD

Abstract

Monetary policy is a set of measures taken by the monetary authorities represented by the Central Bank using its tools to achieve a set of economic goals such as controlling monetary stability, achieving high rates of financial investments, and increasing the participation of the financial and monetary sector in economic activity. This study aimed to evaluate the performance of monetary policy based on its hypothesis that the performance of the monetary policy that was followed in Libya during the period (2002-2023) was not effective and the monetary policy did not achieve the goals on which it was based. The study followed the descriptive analytical approach, and it was reached to accept the hypothesis of the study that the monetary policy during the period (2002-2023) was not effective and did not achieve the goals on which it was based, through: The Libyan economy during the study period was characterized by a high rate of currency in circulation, which is a result of the high monetary preference, and the low confidence factor in banks is what indicates the weakness of monetary policy. The increase in the liquidity rate to the real gross domestic product did not achieve an increase or increase in the rate of bank credit, meaning that the monetary policy did not benefit from the volume of savings in the banking system. Monetary policy did not succeed in achieving monetary stability, but the monetary stability coefficient fluctuated between the occurrence of Inflationary and deflationary gaps, and the following recommendations were reached: The necessity for the Central Bank to enjoy complete independence from political and international pressures to ensure taking objective monetary decisions that contribute to resolving the problems facing monetary policy and monitoring and implementing monetary policy periodically, and working to coordinate between economic policies and monetary policy to achieve monetary stability, control inflationary pressures, and accelerate economic reform processes.