(Bloomberg) -- The governor and board of Libya’s central bank on Tuesday refused an order by ruling authorities to step down, setting the stage for a showdown that could deepen the OPEC nation’s political turmoil.
The regulator’s officials said in a statement on the bank’s Facebook page that the Presidential Council, which had issued the decision to replace them, lacked the legitimate authority to replace Governor Sadiq Al-Kabir and the board members. The statement said the bank’s position was explained to a delegation sent in to enforce the order.
The refusal to step down threatens to raise tensions in a North African nation that’s been divided between rival governments in the west and east, and seen little peace or stability since the 2011 ouster of longtime leader Moammar Al Qaddafi. The Presidential Council acts as Libya’s head of state and military commander.
The showdown involving Al-Kabir is just one of the many power struggles playing out in the country that sits atop Africa’s largest proven crude oil reserves. It comes after the eastern-based legislature said last week it was pulling out of a tenuous 2020 cease-fire deal aimed at ending the violence that plagued the country and paving the way for elections.
Read: Libya Power Struggle Builds as Central Bank Pulled Into Dispute
Al-Kabir, who has led the central bank since October 2011, has faced mounting criticism over the management of oil revenues and the state budget. At the same time, he has amassed significant influence and has the backing of the eastern-based legislature and government, as well as support from the United Nations and western countries. The regulator is the sole recognized depot for billions of dollars of oil revenues.
“We would like to assure our people in Libya, and regional and international parties, that the central bank and the banking sector is carrying out work as normal,” Al-Kabir said in the statement Tuesday.
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