Exclusive: Al-Zantouti: “The Real Issue is the Inability to Determine a Fair Exchange Rate for the Dinar”

Financial expert Khaled Al-Zantouti told our source exclusively, “For years, we have failed to establish a fair exchange rate for the dinar, one that is determined using standard economic models based on recognized macro and microeconomic variables.”

Al-Zantouti added, “Over the years, the exchange rate for our dinar has been determined by a group of speculators in the Souq Al-Mushir, driven by their interests and benefits. These individuals (not to generalize) manipulate the supply of dollars to control the rate. This occurs amid the absence of effective monetary policies from the Central Bank of Libya, which has remained a passive observer without monetary policy tools or authority over the reckless spending of competing governments. These governments, in some cases, collaborate with those speculators in a covert agreement to undermine the dinar’s strength.”

He continued, “Amid this shameful and consumption-driven competition and the collusion of crisis traders, the Central Bank remains paralyzed, unable to address the dinar’s plight. This paralysis stems from the lack of integration between monetary, fiscal, and trade policies, not to mention the uncertainty around how the exchange rate is determined—whether it’s fixed, flexible, or subject to partial or full floating.”

“These cumulative factors make it extremely difficult to estimate the exchange rate for 2025 scientifically or objectively. Unfortunately, indicators suggest a continuation of the confusion and speculation that marked previous years.”

Al-Zantouti also noted, “It is evident that the Central Bank, under its new administration, is attempting to establish a foundation for its monetary policy and regulate the currency exchange market. While this effort is commendable, it will likely take time. Ultimately, the Souq Al-Mushir will remain the decisive factor in determining the exchange rate.”

He highlighted the Central Bank’s ability to defend the current exchange rate (with the 15% tax) by ensuring dollar supply, combating inflation, maintaining foreign currency reserves, and potentially using these reserves if oil revenues decline. He remarked, “If the Central Bank manages to maintain the current rate between 6.10 and 6.40, under the present circumstances, it would be a significant achievement.”

Al-Zantouti concluded, “Given the prevailing conditions of unchecked government spending, political instability, and uncertainty around oil prices and production, the Central Bank cannot fundamentally address the exchange rate issue or set a fair and sustainable rate for the long term. However, if it succeeds in maintaining the range of 6.10–6.30 this year, it would undoubtedly be a positive accomplishment. We hope for this outcome.”