Libya's competing governments have reached an agreement to appoint Naji Issa as the new governor of the central bank.

According to AFP, Libya has appointed a new governor for its central bank as part of a United Nations-backed agreement aimed at resolving a dispute between the country's competing administrations that had resulted in a significant reduction in oil output.

Since August, tensions and violence have escalated around the central bank in Libya, a country rich in oil resources but divided between a UN-recognized government in the west and a rival authority in the east. The growing tensions prompted the previous governor, Seddik al-Kabir, to leave the country.

Following discussions facilitated by the United Nations, the two rival administrations reached an agreement on Thursday to appoint a new governor for the central bank.

Under this new arrangement, 108 members of the parliament located in eastern Libya voted unanimously to select Naji Issa as the new head of the central bank, with Miree al-Barasee appointed as vice-governor, according to a statement from the parliament. The newly appointed leadership is expected to establish a board of directors within ten days.

The High Council of State, which functions similarly to a senate and is based in Tripoli, the capital of the country and the seat of the UN-recognized government led by Prime Minister Abdulhamid Dbeibah, is also a signatory to this agreement.

Libya continues to struggle in the aftermath of years of conflict following the 2011 NATO-backed uprising that ousted long-time ruler Muammar Gaddafi. The country remains divided between Dbeibah's administration and the eastern authority backed by military ruler Khalifa Haftar.

In a social media post, Dbeibah described the parliamentary vote as a "positive step that corrects the situation at the Central Bank of Libya," aimed at establishing an independent and professional institution for all Libyans.

In early August, a group of individuals, some of whom were armed, besieged the central bank building, demanding the removal of Kabir, who had faced criticism from Dbeibah's supporters regarding his management of the bank and state funds. Kabir subsequently revealed to the Financial Times that he had fled Libya.

On August 18, the central bank announced the suspension of all its operations following the abduction of its information technology chief, who was later released. Shortly after, the eastern administration accused a "lawless group" associated with Dbeibah's government of taking control of the bank, which led to the suspension of operations across oil fields and terminals in the eastern regions under its authority.

As a result, crude production was cut by nearly half, with daily output dropping to approximately 600,000 barrels, according to the National Oil Company. Libya primarily derives its revenue from oil, with most of its production concentrated in the eastern part of the country.

Oil output had recently risen to 1.2 million barrels per day, while during Gaddafi's rule, it averaged between 1.5 million and 1.6 million barrels per day.

At the signing ceremony on Thursday, Stephanie Koury, the acting head of the UN Support Mission in Libya (UNSMIL), urged for the restoration of full oil production. She emphasized the importance of preserving Libya's resources and sovereign institutions, urging all parties to keep these assets free from political conflict and factional interests.