Author: Amira Cherni

Italian strategic expert Daniele Ruvinetti told our source on Tuesday that devaluing the Libyan dinar will increase the cost of imports, which could significantly impact Libyan households, given the country’s heavy reliance on imported goods.

Ruvinetti confirmed to Sada that inflation may rise, which is an increasing concern as it reduces the purchasing power of citizens who have been suffering from economic instability since 2011. The timing of the decision raises questions: Why now?

He continued, “The Libyan economy has been fragile for years, burdened by political divisions and public debt—which reports indicate has reached 330 billion dinars. This move could be a sign of deeper financial challenges or a response to dwindling reserves, despite the Central Bank’s insistence that its goal is to maintain stability.”

Ruvinetti pointed out that ultimately, this appears to be a temporary fix for Libya’s structural economic problems. The country’s overreliance on oil along with its fragmented political landscape limits the effectiveness of monetary policy. Without broader reforms—such as unifying the split branches of the Central Bank or tackling corruption—this currency devaluation could simply delay addressing deeper issues, he said.

Former member of the Board of Directors at the Central Bank of Libya, Mrajaa Ghaith, stated exclusively to our source regarding the Central Bank’s decision to adjust the exchange rate:

“I believe this decision is hasty and came at the wrong time. Why adjust the exchange rate right after the Central Bank reduced the foreign exchange tax?”

He continued: “Why hasn’t the Central Bank published Resolution No. 18 regarding the exchange rate adjustment? What it did publish on its official page is merely the updated official exchange rate and the new buy/sell prices. So why not publish the decision, especially since it’s not classified?”

He added: “Certainly, the citizen is the one most affected in all cases — we said this when the tax was imposed, and we say it again with the exchange rate. We import 100% of what we need. On top of that, during this time when the world is facing a crisis and prices could rise or there could be an economic recession — you go and raise prices even more?”

Ghaith further stated: “The justifications mentioned are not those of the Central Bank of Libya; these are government justifications. The government has a deficit — let it figure out how to cover it. It’s not the Central Bank’s job to solve the government’s problems.”

According to Ghaith, since currency sales are under the authority of the Central Bank, it can impose tighter controls and limit wasteful use.

“But saying that nearly 2 billion is for personal use — this is all speculation and dollar brokerage.”

Ghaith concluded: “I advise the Central Bank to float the Libyan dinar and spare us. As long as it’s going to follow the black market, every time the rate goes up, the official rate goes up with it! Float the dinar — and may it reach 20 — and let them take responsibility.”

Economics professor at the Libyan Academy, Omar Zarmouh, commented exclusively to our source on the Central Bank of Libya’s decision regarding the exchange rate adjustment, saying:

What is surprising in the decisions issued by the Central Bank of Libya on Sunday, April 6, is that they carry within them a series of contradictions and disturbances that such a prestigious bank should not have fallen into, being the most important economic institution in the country. These include the following:

1. When the new administration took over its duties, it pledged to strengthen the value of the dinar. What we are witnessing today is the opposite.
2. The administration insisted on continuing to impose the tax, which was initially 27%, then reduced to 20%, and again to 15%, defying court rulings that declared it invalid. There is no economic or legal justification for continuing with it.
3. As part of the insistence on imposing the tax, recent rumors have emerged suggesting that the tax will be increased to 33%. Although I don’t believe rumors, by testing this one, it turns out that reducing the value of the Libyan dinar by approximately 13% while keeping the 15% tax is equivalent to imposing a 33% tax. This means that the bank’s administration may have actually intended to raise the tax to 33% but failed to do so, substituting it with a devaluation of the dinar. This indicates the administration is inconsistent in its decisions and lacks a coherent economic policy. This inconsistency is demonstrated by the shifting rates (27%, then 20%, then 15%, then effectively 33%), especially in light of the previous analysis of the 33%.
4. In October 2024, the administration decided to increase the personal transfer allowance from $4,000 to $8,000, only to reduce it now to $2,000, along with a review of foreign currency transfer regulations. This contradicts previous statements from the administration claiming the bank is ready to meet all foreign currency demand. Doesn’t this shake public confidence?
5. The issue is that such decisions appear to be based on nothing but emotion or trial-and-error (“hit or miss”) and are not grounded in any solid economic principles or theories.

He concluded:

Finally, I urge the Bank’s administration to put the ‘goal of monetary stability’ at the forefront of its objectives, to rely on science, and to steer clear of experimentation—whose failed outcomes are well-known in advance to economists.

Our source obtained a reminder from the Central Bank of Libya regarding the deadline for withdrawing the 50-dinar banknotes by the end of April.

The Central Bank stated: The final date to accept both the first and second issues of the 50-dinar banknotes in commercial banks is April 30, 2025.

As the Central Bank of Libya informs citizens of this, it also requests all banks and their branches to allow the public to deposit the mentioned currency into their current accounts. It also calls on them to organize operations in a way that enables smooth and easy deposit procedures within the time frame specified in the decision.

The Central Bank also urges citizens to sort and classify each version of the 50-dinar notes separately, in order to facilitate the deposit process.

Libyan businessman Husni Bey told our source in an exclusive statement:
In my view, the rate approved, with an added 15% fee, actually represents a devaluation of the exchange rate, not an increase as the majority perceives it.

All I hope for is that this 15% fee is used to extinguish public debt and reduce the money supply by 15 billion dinars annually for three years, without being used to fund any government activity.

He continued: I hope observers and economists revisit the stages following the unification and adjustment of the exchange rate on 3/1/2021, where they can confirm its positive effects. It brought price stability, and thus exchange rate stability, leading to a degree of relative security as the wars stopped (Kaniyat in 2018 and Tripoli in 2019). Through this stability, the economy saw relative growth.

He added: The government managed to pay child, wife, and distressed daughter allowances since 2013. All Libyan families benefited at an average of 4,250 dinars per family per year. The parallel exchange rate remained stable for two years, until speculation and instability returned in Q3 of 2023.

He went on: Since Q3 of 2023, and for a year and a half, we haven’t seen the dollar in the free market below 6.200 LYD. In fact, in March 2024, it exceeded 8.200 LYD/$, with a gap surpassing 50%.

He continued: The Governor of the Central Bank of Libya prioritized growing the reserves by purchasing 24 tons of gold, supporting the bank’s reserves with $4 billion in 2023, and adding another $2 billion in Q1 2024. However, despite this, the dinar collapsed in Q1 2024, exceeding 8.000 LYD/$, which led to the imposition of a 27% fee in Q2 of the same year.

The question: What is the real price of the dollar? The official rate or the market rate? In my conviction, the real rate is the market rate, and the official rate is nothing but a “safety belt” granted to speculators.

He added that the dollar has exceeded 7.000 LYD in the past week, and the success or failure of the official rate policy with a 15% fee should be measured by evaluating the dollar at 6.400 LYD including the fee. It is a successful policy if the dollar drops in the parallel market to below 6.700 LYD/$, indicating a 4% drop. To prove the theory and equation, the price trend in the parallel market must be monitored.

He said: I affirm that I do not believe in anything called an “official rate,” “fixed rate,” or price support for goods, services, or currency. In economics, there’s no such thing as price support, and it’s unacceptable to protect speculators and grant them guaranteed profits that exceeded 20% in Q1 2025 and 50% in Q1 2024.
It is unreasonable that the dollar is sold on one side of the street, only to be resold on the other with guaranteed speculation profits exceeding 20% — this is economic madness. And I am astonished by those who defend the status quo.

He confirmed that many economists use buzzwords like “sustainability” and “economic reform”, but refuse to deal with the two biggest black holes in public spending:

1. The wages chapter, estimated at 65 billion dinars, of which only 60% are real salaries, while the rest goes to items like per diems, uniforms, accommodation, bonuses, and other extras.
2. The second black hole is the subsidy policy for fuel and energy, which devours nearly 40% of our oil production, estimated at 77 billion dinars annually, and steadily increasing. These products are subject to theft, smuggling, and misuse (based on the mindset of “if it’s free, take more”).

In recent years, a new drain emerged called external fuel swaps, which make up 66% of the total fuel bill, while the remaining 34% is consumed locally since 1982 — comprising locally refined fuel, gas, heavy oil, and Ubari power station oil.

He concluded: The majority calls for reform, but they reject change, and insist on adopting tools and mechanisms that have proven failures, expecting different results after 70 years of failure.