Al-Zantouti Writes: “Our National Economy Between the Dinar Devaluation, Reserve Drain, and the IMF”

Financial expert Khaled Al-Zantouti wrote an article stating: “In these blessed Ramadan days, we continue to receive troubling news and statistics. From horrific traffic accidents, leading to a significant number of deaths, to reports from the Central Bank highlighting the severe economic difficulties and the weakness of our economic structure. Our economy is built on a disastrous dual government spending shared by two competing governments, as if we were two separate countries, each with numerous shadow governments operating under different “legitimacies,” all trying to seize control to embed mismanagement, corruption, regionalism, and power struggles.

Major global newspapers accuse us of oil smuggling, with ships leaving national ports disappearing from radar, and no one knows where or how they go or who is behind them. There are also accusations of certain names and companies (allegedly private) collaborating with public institutions to oversee and execute “respectable” smuggling deals worth billions. We cannot confirm or deny these claims, but as the saying goes, “Where there’s smoke, there’s fire.” I won’t generalize, but let us take a look at the facts of some of the numbers published these days, summarized as follows:

• Oil revenues deposited into the Central Bank over 17 days amounted to approximately 778 million dollars, while foreign currency sales reached 2.3 billion dollars. This means our dollar expenditure is about three times our dollar income.
• Personal transfers accounted for almost 100% of documentary credits, meaning our personal expenses match what we import for food, drink, healthcare, transport, and so on.
• Most of these personal expenses benefit from the difference between the official and parallel exchange rates, after commissions from Turkish and Emirati exchange companies and their Libyan partners.
• If we continue on this path, we will need to use our reserves, possibly drawing 3 billion dollars a month. This means we will lose about 36 billion dollars annually from our reserves to cover the dollar financing gap, and we will completely deplete our reserves within two and a half years. After that, we’ll have nothing left but speculation and uncertainty, except for the fortunate few.

At the same time, some “economists” claim that oil will never fall below 80 or 70 dollars. Don’t they know that oil recently dropped to 30 dollars due to a surplus of oil supply? Could this happen again at any moment, especially with Trump’s policy, which repeatedly emphasizes reducing oil prices to below 50-60 dollars? With the potential for closer US-Russian relations and the possibility of Russia exiting the OPEC+ agreement, if oil prices drop to 50 or 60 dollars, we will burn through our reserves in a matter of months. And then, “God help us.”

There are no solutions for the Central Bank if this tragic situation continues, except for a dinar devaluation into the double digits, possibly bringing us under the control of the IMF and the World Bank. In such a case, we would have to adhere to their “magical” remedies and face their demands.

In these last ten days of Ramadan, we must turn to God, work towards unity, learn from history, and tackle corruption, mismanagement, and division. We pray for the success of the sincere people of our nation.”