Dbeibeh: “Raising the Exchange Rate Was Not a Solution… It Was a Punishment for Citizens, and Currency Strength Is More Important Than Illusory Projects”

The Prime Minister of the Government of National Unity, Abdul Hamid Dbeibeh, stated that citizens are noticing the daily rise in the dollar exchange rate, alongside the continuous increase in food prices. He noted that the Central Bank of Libya is attempting to find solutions to halt the decline in the value of the local currency and contribute to economic stability, but these efforts are insufficient because the root cause of the crisis, parallel spending, has not yet been addressed.

He added that parallel spending occurs outside the state budget, and that for three years the government has been warning and calling on all parties to urgently halt it. He explained that parallel spending has exceeded 300 billion dinars over the past three years, a figure acknowledged by the House of Representatives and classified as public debt. The exchange rate adjustment was approved to repay it, effectively placing the burden once again on citizens, stressing that this spending is the main reason behind the worsening crisis.

Dbeibeh explained that demand for foreign currency exceeds supply, meaning the crisis has not been fundamentally resolved. He said he remained silent in recent months and endured attempts to hold the government responsible in order to allow space to reach a real solution. He affirmed that the solution lies in addressing the causes of the crisis through dialogue and meetings—despite their difficulty—held between technical representatives of the government, the Central Bank, the House of Representatives, and the High Council of State. These efforts resulted in the signing of an agreement between the House of Representatives and the High Council of State under the direct auspices of the Central Bank.

He expressed the government’s appreciation to the U.S. Federal Reserve and the administration of President Trump for their role in facilitating the agreement, which grants the Central Bank sole authority to determine allocations under Chapter Three (Development), with spending to be conducted according to the financial capabilities assessed by the Bank. He also announced that a cabinet reshuffle will be revealed during the upcoming Cabinet meeting.

Dbeibeh said all parties have committed to the agreement, which will be made available to citizens, noting its key provisions:

1. Ensuring economic and financial stability.
2. Achieving genuine unification of the Central Bank system.
3. Prohibiting borrowing from banks or the Central Bank, creating new public debt, or unilaterally rescheduling or extending existing debt without approval from all parties and in accordance with legal procedures.
4. Requiring all parties to deposit all sovereign revenues—oil and non-oil—including taxes, customs, and other revenues into the general treasury account at the Central Bank of Libya.

He added that parties have pledged to implement the Central Bank’s plan and joint controls governing letters of credit and transfers for both the public and private sectors, as well as comply with anti-money laundering and counter-terrorism financing regulations concerning transfers for development projects under the agreement. The Central Bank will have the right to suspend funding to any entity violating the agreement until corrective measures are taken.

He stated that the Libyan economy has strong potential, highlighting the signing of key agreements in the oil sector with major international oil companies to increase foreign currency revenues and stimulate economic activity, positively impacting citizens’ lives. He called on the other party to adhere to the 2026 financial agreement, halt random spending, and implement projects in line with the country’s financial capacity.

He further explained that recent national circumstances necessitated a restructuring of the government to fill vacant portfolios and inject new leadership to advance service development. Details of the reshuffle will be presented at the next Cabinet meeting, expressing hope that it will be positive and include capable national figures.

He questioned the logic of spending 70 billion dinars without a plan in 2025, when the state’s actual capacity does not exceed 10 billion—solely within Chapter Three. He said the difference turns into “imaginary money” used to purchase dollars from the parallel market, after which the Central Bank is asked to raise taxes, questioning the economic rationale behind such an approach. He stressed that a real budget distributes available resources according to priorities, not random spending that leads to economic collapse.

Dbeibeh noted that his government has not recorded a single dinar as public debt during its term and has not borrowed domestically or externally from banks, despite legal provisions allowing it. He pointed out that banks in Tripoli alone hold more than 100 billion dinars, in addition to traders’ balances exceeding another 100 billion, none of which the government has touched.

He concluded by affirming his belief that citizens’ need for a strong currency and reasonable prices ensuring a dignified life outweighs their need for major projects that have not achieved real development. He revealed that he has officially addressed the Governor of the Central Bank of Libya, requesting that if the other party fails to comply with the signed financial agreement, spending under Chapter Three (Development) should be suspended for all.