Exclusive: International Trade Expert Yassin Abu Sriwil on Libyan Dinar Stability Against the Dollar in 2025

International trade expert Yassin Abu Sriwil told our source that economic forecasts point to relative stability in the Libyan dinar’s exchange rate against the US dollar in 2025, with a potential slight improvement. According to global macroeconomic models and estimates by Trading Economics, the Libyan dinar is expected to trade at 4.89 against the dollar by the end of the current quarter and reach 4.92 within the next 12 months.

1. Parallel Market and Its Effects

Despite official forecasts, local estimates suggest the dollar could exceed 5.50 LYD in the parallel market due to unregulated demand for hard currency and new policies on essential goods allocations, limiting foreign currency access.

“While these restrictions aim to rationalize spending, the Central Bank of Libya’s lack of a clear budget for foreign currency needs keeps demand high. Cross-border trade leakage to neighboring countries also adds pressure on the parallel market,” Abu Sriwil said.

2. Factors Supporting Exchange Rate Stability

The stability of the official exchange rate is closely tied to the Central Bank’s strong foreign reserves, which stand at $84 billion, including $29 billion of usable reserves by the end of Q1 2025.

Abu Sriwil added that the IMF forecasts Libya to achieve the highest Arab economic growth rate of 13.7% this year, relying on stable and increased oil production supported by rising global demand amid geopolitical and economic crises.

3. Demand for Foreign Currency

Data indicates a decline in demand for foreign currency during the first half of this month compared to last year, due to:

• Reduced Parallel Market Gains: Narrowing the gap between official and parallel exchange rates has lowered speculative trading.
• Stricter Currency Policies: Tighter documentation requirements for foreign currency transactions have curbed excessive demand.

4. Economic Challenges and Influencing Factors

While the outlook is positive, key risks remain:

• Oil Prices: Libya’s economy heavily depends on oil revenues, and fluctuations in prices directly impact reserves.
• Political Stability: Continued divisions or internal crises could undermine the Central Bank’s ability to manage the market.
• Economic Reforms: Integrating the parallel market with the official system is crucial for stabilizing the dinar.

Outlook and Recommendations

“With robust reserves and rising oil revenues, the official exchange rate is expected to remain stable. However, the parallel market remains a concern, driven by speculation, persistent demand, and trade leakage,” Abu Sriwil explained.

Achieving sustainable stability requires strategic measures, including:

• Enhancing transparency.
• Developing the foreign exchange system.
• Effectively utilizing oil revenues to strengthen the national economy.
• Prioritizing non-oil industries and exports for long-term economic resilience.