The country’s $65bn sovereign wealth fund will invest up to $2bn in Europe, the US and other markets over the next six months.

“We want to diversify, number one in Europe, number two in the United States, and then in emerging market economies,” Farhat Bengdara, an LIA board member and governor of the Central Bank of Libya was quoted as saying by Reuters on the sidelines of a meeting of African central bank governors in Cairo on 23 October.

About 10 per cent of the authority’s assets are now in the form of equities.

This will be increased by 2-3 per cent over the next six months through investments in pharmaceuticals, telecoms and utilities companies.

Bengdara said that LIA had a $300m portfolio that was managed by the now bankrupt Lehman Brothers, of which it hopes to recover 60-70 per cent.

Bengdara expects inflation in Libya to drop to between 5-6 per cent in 2009, down from 12 per cent this year.

He also said GDP growth would slow from 6.5 per cent this year to 6 per cent in 2009.