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Al-Tarhouni: “In Light of the Central Bank’s Decisions… Where Is the Standard of Living in Libya Headed?”

Written by Amira Cherni on . Posted in Economic articles. No Comments on Al-Tarhouni: “In Light of the Central Bank’s Decisions… Where Is the Standard of Living in Libya Headed?”

Economic expert Dr. Abdullah Wanis Al-Tarhouni wrote:

Many have voiced their opinions following the release of a circular or statement by the Central Bank of Libya regarding revenues and expenditures for January and February 2025. Frankly, the statement is incomplete and its figures inaccurate. Its main aim appears to be preparing Libyan public opinion for the upcoming scenario—something that became evident with the first working day after the Eid al-Fitr holiday.

Fundamentally, the Central Bank is responsible for monetary policy, which must be aligned with other economic policies. Therefore, publishing expenditure data is primarily the role of the Ministry of Finance, as it is responsible for fiscal policy, not the Central Bank. Moreover, anyone claiming that Libya’s crisis is purely economic either misunderstands the situation or is focusing on details while missing the core issue. Libya’s crisis is a deeply political one, and the economic imbalances began in 2014—when the political turmoil started, followed by oil shutdowns, wars, and internal conflicts. Therefore, returning to the root of the problem is the foundation of any solution.

Today, as Libyans, we stand at a crossroads. With Trump rising to power, crude oil prices dropped, forcing Libya to diversify its income sources to fill the financing gap and catch up with Gulf countries that are already far ahead. I believe it is time to listen to experts and wise voices, and to learn from nations that have endured what we have.

On the technical side, some believe that Law No. 1 of 2013, which prohibits usury in Libya, has deprived the Central Bank of one of its key tools: interest rates. This has made the exchange rate the only mechanism available since 2013. Personally, I don’t fully agree with this view. The country needs to activate the stock market, regulate government spending through a proper budget law, control foreign labor, and—most importantly—revive the role of regulatory bodies and fight corruption relentlessly.

It goes without saying that spending without a budget law, the dysfunction of regulatory bodies, the continuation of crude-for-refined oil barter arrangements, and the ongoing shutdown of local refineries—along with printing over 100 billion dinars while keeping old currency editions in circulation—will inevitably lead us to bankruptcy sooner or later. Solving these four major issues could stabilize the economy, but it won’t fully recover without addressing other influencing factors.

Currently, trade, fiscal, and monetary policies operate in isolation. Meanwhile, the Central Bank’s Board of Directors issued Resolution No. 18 of 2025, devaluing the national currency to fill the financing gap and avoid drawing from reserves. However, this decision will only increase poverty due to inflation and widen the gap between the wealthy and the underprivileged. Reports suggest the decision was made with half the board members agreeing—not the majority—thus violating the Libyan Banking Law. The Central Bank would be better off halting loans to the government (except for Chapter One of the budget), and even that should only be disbursed through the “Aysar” system controlled by the Central Bank.

Without repeating what has already been published, several Libyan experts—including Dr. Mohamed Abu Snena, Dr. Mohamed Mohamed Al-Shahaty, and Dr. Omran Al-Shaibi—have proposed mechanisms to address current distortions in the Libyan economy. Central to these proposals is the legal control of public spending through a budget law, the closure of the majority of Libya’s embassies, consulates, and missions abroad (which are double the number of U.S. missions), tightening controls over Letters of Credit and currency transfers, withdrawing and burning 50-dinar notes as part of a plan to remove at least 50 billion dinars from the market, raising customs duties on luxury and non-essential goods, restarting local refineries, and—simultaneously—restructuring state institutions through proper integration and elimination based on valid criteria, while also correcting the situation of foreign labor.

In any case, whether we like it or not, returning to a real economy based on agriculture and industry is inevitable. We must wake up from the illusion brought about by the “Dutch disease” that has plagued Libya as it did other nations before us. In the coming years, we must secure our food from our vast lands, promote small and medium industries, expand industries related to crude oil, and support innovation and the knowledge economy.

In conclusion, I believe Libya’s crisis is political, not economic. The measures listed in this article are merely responses to a decades-old issue. We need years of thoughtful planning to restore Libya’s dignity and allow its people to live with pride on their own land.

Exclusive: Ruvinetti Reveals the Consequences of the Exchange Rate Change and Its Impact on Libyan Families

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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.

Exclusive – Commenting on the Central Bank’s Exchange Rate Adjustment Decision: Ghaith: The Justifications Presented Are Not from the Central Bank but from the Government, and What’s Happening Is Speculation and Brokerage in Dollars

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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.”

Exclusive: Zarmouh: A Series of Contradictions and Disturbances in the Decisions of the Central Bank of Libya

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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.

Abu Snina: “Proposals to Save the National Economy from Collapse”

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Written by economic expert Mohamed Abu Snina: What we have repeatedly warned about has now occurred. Although much of what was mentioned in the statement issued by the Central Bank of Libya today is known to many, it serves as a declaration and warning that what lies ahead will be worse for the Libyan economy and the ordinary citizen. Distortions have affected the foundations of the macroeconomy. When the public debt to GDP ratio reaches 125%, when public expenditure exceeds total income by 165%, and when the economy suffers from a deficit in the general budget and the balance of payments (also known as the two gaps), then the economy is in a real and dangerous crisis.

When foreign currency revenue in the first quarter of 2025 is about 4.6 billion dollars, this predicts further deterioration of economic conditions, and the Central Bank will not be able to defend the exchange rate of the Libyan dinar, exposing it to further depreciation.

The Libyan economy is threatened by entering a double inflation spiral and a deficit, with the financial sustainability of the state faltering. The government may cease its operations (government closure) as oil revenue is no longer sufficient to pay salaries from the public treasury following the sharp decline in oil prices.

In the face of these unprecedented conditions, those at the forefront of the scene and the House of Representatives have no choice but to abandon political wrangling and take urgent measures to save the present and future of the Libyan economy, and to prevent further deterioration in the living standards of citizens. These measures should include the following:

First: Assigning a small rescue government across all Libyan territories, halting the waste and imbalance in public expenditure, and taking responsibility for preparing and implementing an economic and financial reform program that is presented to the House of Representatives and issued as law.

Second: Approving a general austerity budget for the state before the middle of the fiscal year 2025, within the limits of available resources and the absorptive capacity of the national economy.

Third: The first application of the reform and rescue program should target government institutions themselves by truly unifying divided sovereign institutions, making them accountable and subject to follow-up.

Fourth: Reducing, abolishing, and restructuring many of the newly established administrative units (ministries, embassies, public institutions, and agencies), and reducing the number of employees within them.

Fifth: Reorganizing the priorities of developmental spending and seeking sources of financing outside the general budget, reforming subsidies, combating fuel smuggling, and tackling money laundering activities.

Sixth: The Central Bank commits to not lending to the government or financing any unlisted expenditures in the general budget. It should work to limit the increase in the money supply, improve the use of exchange rate policy, and not use this policy to address the results of inefficient public expenditure policies. The Central Bank should cease destabilizing the exchange rate and recognize that adjusting the exchange rate will not solve the problem of the disorganized Libyan economy.

Seventh: Subjecting revenues from crude oil and gas exports to accompanying review and audit, limiting the National Oil Corporation’s authority in handling oil revenues, and ensuring full and transparent remittance of these revenues to the Central Bank of Libya on time.

Eighth: Consolidating and unifying all foreign currency reserves and deposits available at various state institutions (Libyan Investment Authority, Long-Term Fund, Libyan Foreign Bank, Economic Development Fund, and other institutions with foreign currency assets) in order to protect and manage them properly. These funds should be placed under the control of a single entity, the Financial Stability Committee, chaired by the Central Bank of Libya, to address potential challenges that may threaten the future of the state, and to be used to support the stability of the exchange rate of the Libyan dinar until the economic and financial conditions stabilize.

The required rescue program will come with economic and social costs that should not be borne by the citizens alone or vulnerable groups. The proposed rescue government must take full responsibility for reducing public expenditure, halting corruption, and abolishing many newly introduced spending items. It should focus on providing essential public services, ensuring security, protecting borders, eliminating new and duplicated administrative units, and working to increase non-oil sovereign revenue (taxes and customs duties), collecting revenues from domestic fuel sales, and remitting profits and surpluses from telecommunications companies and public enterprises to the general revenue account in the treasury.

Vulnerable segments of society must be provided with the necessary social protection to prevent them from falling below the poverty line. The proposed rescue government, relevant institutions, and all related entities (legislative, executive, and advisory) should focus on preparing a vision for the future of the Libyan economy, aiming to restructure it to diversify sources of income and reduce the oil sector’s dominance over economic activity in the long term.

Exclusive: Central Bank Issues Reminder on 50-Dinar Withdrawal Deadline and Urges Action from Citizens and Banks

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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.

Exclusive: Husni Bey Comments on the Exchange Rate Adjustment: The Majority Calls for Reform but Rejects Change, Insisting on Tools and Mechanisms Proven to Fail

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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.

Libyan Economic Experts Urge Immediate Reforms Amid Growing Crisis

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Sada republishes an important message from a group of economic and financial experts regarding Libya’s economic situation and proposed solutions. They said: Following the report published yesterday by the Central Bank of Libya, which included alarming figures and assigned responsibilities resulting from the state of governmental division, and the ensuing rampant and inflated dual spending, waste, and corruption, both governments — East and West — emerged, each accusing the other and holding it responsible for the deterioration of the country’s financial and monetary conditions.

The experts added: This is what experts and concerned observers have warned about for a long time, and they have presented clear remedial solutions.

Since December 2024, a group of experts has been calling for consensus on an open letter addressed to the executive, monetary, and legislative authorities, including proposals to address the financial and economic chaos — as a preemptive step before reaching the point of collapse.

This open letter, signed by a group of experts and previously published by Sada newspaper, is being republished today in hopes that it will find listening ears.

Regarding the current economic situation:

Anyone who cares about the Libyan people must tell them the whole truth. Therefore, sugar-coated speeches and alignment with the distortions of the economic situation only serve narrow interests and are a gamble with the country and future generations.

Living standards have declined over the past decade, with poverty rates increasing, individual shares of GDP shrinking, and actual inflation and unemployment rates rising significantly, along with the erosion of citizens’ savings. The vast disparity in economic opportunities among citizens threatens a political explosion due to accumulating feelings of marginalization — whether real or perceived — and this becomes even more likely when those feelings align with narratives of regional and social marginalization.

Macro-financial indicators have reached levels that threaten financial sustainability and undermine stabilization efforts. It is therefore imperative to launch a comprehensive program to restructure the Libyan economy.

Institutional division — both horizontally and vertically — has increased the confusion in the state’s economic and financial management. Regardless of any proposed temporary solutions, they cannot replace the need to unify administrative and financial decisions by unifying all political institutions and renewing their legitimacy through general elections.

Regarding the general budget:

The state’s general budget is originally meant to reflect strategic vision and serve as a tool for funding, oversight, and monitoring. Unfortunately, it is currently used solely for current expenditures, which robs it of effectiveness and weakens its political and societal credibility.

A unified budget that includes all government spending items across Libya is essential. Despite all possible reservations, a unified budget remains better than any financial arrangements.

The budget should be realistic and take into account actual needs and expected revenues. It should also be based on macroeconomic and sectoral indicators — both quantitative and qualitative — to enable monitoring and evaluation within the framework of fiscal policy. The absence of economic indicators in general budgets reflects a disappointing, exploitative approach to public funds.

Regarding revenues:

All public entities tasked with collecting public revenues must fulfill their duties. No entity should retain or deduct any portion of revenues for any reason or transfer them to an unauthorized party.

All proceeds from the sale of oil, gas, petroleum derivatives, and all other sovereign revenues — without exception and within their due deadlines — must be deposited into the General Revenue Account of the Ministry of Finance.

In a country that primarily relies on oil revenues, the National Oil Corporation must disclose detailed monthly data on its exports, including quantities of each crude type, selling prices, the foreign partner’s share, and the public treasury’s share.

Regarding spending controls and standards:

The government and the National Oil Corporation must urgently end the oil cargo swap system used to supply the local market with fuels. These needs must be precisely identified and imported in specified quantities, and the NOC should contract with global refineries under transparent procedures. The NOC and the General Electricity Company must conduct monthly reconciliations to determine the actual fuel and gas supplies received by the company.

For both economic and security reasons that affect stability in Libya, fuel subsidies must be restructured according to a studied and gradual policy that includes a social safety net, enhances citizens’ purchasing power, and — most importantly — gains public trust through transparency and communication.

Rationalizing spending in wages and subsidies may be a harsh and painful procedure for certain social groups. However, the state must pursue a policy of truth with citizens and stop appeasing public opinion or serving factional interests.

For budget year 2025, the following spending rationalization measures must be implemented:

  • Halt all government hiring and salary increases throughout 2025 to allow for an accurate employee census and to determine actual staffing needs. Review the release of financial entitlements due to observed irregularities.
  • Issue a unified salary scale that reflects living standards and provides a reasonable balance between high and low grades.
  • Review inflation in budget items such as food allowances, accommodation, and vehicle purchases.
  • Reduce the number of entities funded by the public budget by merging public institutions with similar purposes.
  • Reduce the number of Libyan embassies and diplomatic missions abroad and the number of personnel working in them.
  • Stop spending large sums of public money without clear priorities on social programs such as marriage support, unless accompanied by economic and field studies that demonstrate their impact on the targeted groups.

We urge the relevant authorities to activate and support the following institutions due to their vital roles in economic development: Civil Status Authority, Real Estate Registry, Statistics and Census Authority, Tax Authority, Urban Planning Authority, Public Property Authority, and Customs Authority.

Development priorities should go to energy, electricity, essential social services, and infrastructure projects. In all cases, financial allocations for targeted projects must be clearly identified by name, geographical distribution, estimated value, and required cash flow over the implementation period.

It is essential to commit not to transfer funds from Chapter III (Development) to other chapters in the general budget.

Regarding budget execution monitoring and evaluation:

The authors of this message recognize that the general budget contains structural realities that are difficult to bypass — such as the bloated number of employees, citizens’ dependence on subsidies, and widespread corruption in the administrative system. However, they also understand that addressing structural imbalances and fighting corruption takes time, requires determination, and must be carefully planned so that well-intentioned policies do not turn into uncalculated decisions that fuel further conflict.

All public entities, without exception, must be subject to oversight rules from regulatory bodies to promote transparency and governance.

It is necessary that all public entities publish monthly reports on revenues and expenditures, as well as reports on development projects, their costs, and any financial or time deviations.

The Audit Bureau and the Administrative Control Authority must issue quarterly reports on development spending, in addition to the annual report in the first half of the following year to address violations before they worsen.

All state institutions must close their final accounts to enable the determination of their financial positions and the calculation of obligations and debts owed by the public treasury.

Regarding accompanying reform measures:

We urge legislative and executive institutions and think tanks to review all laws related to the state’s financial and economic system. These reviews must be carried out systematically and consultatively to ensure smooth implementation.

Until that happens, institutions must manage their finances in accordance with current laws and in a spirit of cooperation and professionalism that should prevail among state institutions.

A population census and essential surveys must be conducted to provide reliable indicators for economic decision-making and proper timing.

Economic and financial data must be provided and published in a comprehensive and reliable manner.

Resources must be allocated to municipalities, granting them the authority to spend on their identified development priorities.

Priority in public procurement and contracting should be given to the Libyan private sector.

The public treasury must not bear any financial commitments that do not have allocated provisions in the general budget. The Ministry of Finance must be responsible for the sound management of Libyan state assets — including public companies and sovereign funds — and must work to maximize their revenues without disposing of them outside the general state budget.

Procedural steps for budget approval:

If the economic situation is exceptional, the 2025 budget must also be handled exceptionally. To ensure its approval, commitment, and smooth implementation, wide political consensus among key stakeholders is necessary, along with active coordination between technical bodies and relevant political institutions.

The Central Bank of Libya must maintain its independence and operate strictly within the powers defined by Libyan legislation to preserve its professionalism and neutrality. Coordination with the Ministries of Finance and Economy must be arranged in a way that allows each to exercise its powers without overlap.

In conclusion, seriously and responsibly addressing the economic challenges requires launching a comprehensive political process that integrates all its tracks without delay or postponement by the UN mission. If Libya needs a solid national charter among its political and social components, it also needs a deep dialogue on the desired economic model — one that should guide the work of all institutions and address the deep-rooted and recurring causes of conflict.

Exclusive: Al-Harati Speaks on the Risks Highlighted by the Central Bank Data That Led to the Devaluation of the Libyan Dinar and Its Accompanying Effects

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Legal advisor Hisham Al-Harati spoke exclusively to our source stating: “What is happening in Libya is a blatant example of a betrayal of trust, as corrupt parties entrusted with the responsibility of running the state are seizing the Libyan people’s funds through illegal means and administrative violations. This constitutes a criminal offense that infringes on the rights of Libyan citizens and exposes them to enormous economic and social risks.”

He added: “According to Libyan law, these acts are criminalized and subject to punishment. Therefore, every individual who has participated in this unjust course of action must bear criminal responsibility before the Libyan judiciary, and justice must take its course without leniency or favoritism.”

He went on to say: “The crime of looting and betrayal of trust is not merely an individual act, but rather an organized crime that threatens the state’s stability and its economic and social security. It is unacceptable for corruption to infiltrate every corner of the state without accountability.”

He concluded: “The law must be the invincible shield against this blatant violation of the people’s rights, and the Libyan people must pressure the judiciary to assume its role as outlined by law—ensuring accountability and preventing criminals from escaping punishment—so that all are equal before the law, and justice is not limited to those without connections or influence, as has unfortunately been the case for years.”

Al-Zantouti: “After Today’s Dinar Devaluation – What’s Next, and Is This the End!?”

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Financial Analyst Khaled Al-Zantouti wrote an article saying:
Today, our Central Bank came out with a decision to devalue the exchange rate by 13.3% (and I don’t know why the decimal is over 13 — is it the result of accurate calculations based on a fair pricing model for the dinar (I hope so), or is it a stroke of bad luck within a “hit or miss” framework?). In truth, the devaluation may exceed 16% if we take into account the increase in the tax amount as well.

This decision and its context are not surprising — it was expected from the Central Bank, as it has no other solutions under a miserable legacy and a bitter reality. And for that, it is excused — perhaps this is its way of showing the truth as it is. But the big question remains: Is this the end, or are there more endings to come?

We hope this is the end, but unfortunately, the data and figures presented by the Central Bank today suggest otherwise.
When the dollar spending deficit reaches around 50%, and when public debt hits 330 billion dinars, exceeding 130% of GDP, and this debt is consumptive, plagued by corruption and the corrupt… and when the per capita share of public debt reaches about 45,000 dinars (while less than two years ago it was 30,000 dinars), that means a yearly increase of about 25%, and when public spending reaches unprecedented levels, and salaries hit 75 billion, and the two governments continue in suspicious consumptive spending, and when, and when, and when… etc.

And when both legislators and executives insist on creating conflict and division, strengthening fragmentation to stay in power, fighting over shared wealth — with corrupt, corrupting hands, backed by power, dirty money, smuggling, mismanagement, regionalism, and quotas — and I don’t generalize…

Then what do you expect — is this the end?

Unfortunately, if we continue on this path, we’re heading toward the mother of all ends.
After this official devaluation of the dinar, traders will exploit the situation and raise their prices by much more than the devaluation percentage — some may raise prices by 25% or more. We’ll see!

They will ignore the fact that their letters of credit were opened at the old rate, and their warehouses are full of goods that have been stocked for a while. They were prepared — they knew in advance this devaluation was coming!
I don’t mean to generalize — maybe there are those who are honest with God and themselves.

The solution isn’t just in unifying the general budget. It goes much deeper — to treating the underlying causes of this unreasonable consumptive spending, to treating the corruption and mismanagement that made us among the world’s most infamous corrupt nations.

It means addressing our regional divisions, our “my share–your share” mentality. It means restructuring our economic and administrative systems with scientific, objective methods, and Libyan national spirit — even without any (pan-Arab) zeal, or Septemberist, or Februaryist affiliations.
We are all children of Libya. Libya is the homeland and the refuge.

If there is will and sincerity with God and the nation, the solutions are obvious, and we can all — I repeat, all — solve our economic, political, and social problems.
Just a bit of integrity, and remember the words of the Almighty:

“Indeed, Allah will not change the condition of a people until they change what is in themselves. And when Allah intends for a people ill, there is no repelling it. And there is not for them besides Him any patron.”
[Surah Ar-Ra’d, 13:11]
True are the words of God Almighty.

Exclusive: Al-Bouri to Sada: “The Dinar Devaluation Won’t Be the Last if Government Deficit Financing Continues”

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Banking expert Naaman Al-Bouri spoke exclusively to our source regarding the Central Bank’s latest statement, saying:
“The statement issued today by the Central Bank of Libya shows that the bank is facing a difficult and complex situation.”

He added:
“Excessive public spending by two governments, along with resorting to deficit financing during Q4 of 2024 and Q1 of 2025, coinciding with the decline in oil and sovereign revenues, all pushed the Central Bank to make the decision to devalue the exchange rate.”

He continued:
“The key question now is: Can the Central Bank refuse to continue financing the deficit until a unified budget and austerity-based fiscal policies are implemented?”

He further stated:
“Unfortunately, the absence of the interest rate—as one of the most important monetary policy tools—has forced the Central Bank to use the exchange rate as its only tool, which poses serious economic risks.”

Al-Bouri stressed:
“The Central Bank must insist on its commitment not to finance any government through deficit spending. Government funding must be directly tied to state income from oil and other sources. Chapter II of the budget must be strictly linked to actual state revenues.”

He emphasized:
“If the Central Bank cannot stop deficit financing, then today’s decision to devalue the dinar will not be the last one this year.”

He concluded:
“Deficit financing means creating a new money supply, and every new dinar created will seek to convert into dollars, further exacerbating the exchange rate crisis. Therefore, all off-budget government financing must immediately stop. The legislative authorities must take historic responsibility to unify the government and adopt a single budget that does not exceed state revenues. The current situation requires a collective effort from all sides.”

Al-Shaibi: “The Central Bank Cannot Alone Face the Imminent Challenges… and These Are the Solutions After the Exchange Rate Adjustment”

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Banking expert Imran Al-Shaibi wrote an article on his official page commenting on the statement issued by the Governor of the Central Bank of Libya.

Main Economic Challenges

1. Dual Spending
One of the most prominent challenges facing the Libyan economy amid political division is dual spending. The total dual spending by the two governments reached 224 billion Libyan dinars in one year:

  • 123 billion from the Government of National Unity
  • 59 billion from the Libyan Government
  • 42 billion from oil swaps
    This situation reflects weak coordination between political parties and increases financial pressure on the state.

2. Revenue-Expenditure Gap
Only 136 billion dinars in revenues were recorded, indicating a massive funding gap compared to total spending of 36 billion USD. This imbalance created a high demand for foreign currency, exacerbating pressure on currency reserves and the exchange rate.

3. Weak Oil Revenues Deposited into the Central Bank
Only 18.6 billion USD was deposited, while expenditures reached 27 billion USD, creating a supply-demand gap of around 8.4 billion USD.

Negative Effects of the Current Situation

  • Increased Money Supply: Reached 178.1 billion dinars due to the expansion in dual spending, causing inflation and reducing citizens’ purchasing power.
  • Exchange Rate Pressure: Eroded local and international confidence in the Libyan economy and led to increased inflation.
  • Public Debt Surge: Reached record levels of 270 billion dinars, distributed as:
    • 84 billion with the Central Bank in Tripoli
    • 186 billion with the Central Bank in Benghazi
  • If the current situation persists, public debt is expected to hit 330 billion dinars by the end of 2025, especially without a unified budget.

Status in Q1 2025

Total dollar expenditures reached 9.8 billion USD, distributed as:

  • 4.4 billion USD for credits and transfers
  • 4.4 billion USD for trade and personal use cards
  • 1 billion USD for government expenditures

This spending pattern shows a high demand for foreign currency, further pressuring reserves.

Oil revenue shortfall: Only 5.2 billion USD collected until March 27, indicating a deficit of 4.6 billion USD in the first quarter of the year.

Key Contributing Factors to the Crisis

  • Governmental and Institutional Division: Absence of a unified economic vision and conflicting decisions, further complicating the economic landscape.
  • Ongoing Smuggling of Goods and Fuel: Raised import demand, draining foreign currency reserves.
  • Foreign Labor and Illegal Immigration: Drain approximately 7 billion USD annually, adding a heavy burden on the economy.
  • Money Laundering and Terrorism Financing in the Parallel Market: Pose serious security and economic threats, destabilizing the financial system.
  • Lack of Monetary Tools: The Central Bank lacks instruments like interest rates to curb inflation or absorb excess money supply.

What’s the Solution?

  • Adjusting the Exchange Rate: To create balance in economic sectors, while considering its inflationary impact.
  • Using Part of the Reserves Temporarily: Could help stabilize the exchange rate, but must be done cautiously to avoid depletion.
  • Unifying Legislative and Executive Authorities: To end political and institutional division, improving financial resource management.
  • Developing a Short-Term Economic Vision: Including a unified budget to control public spending and restore financial balance.
  • Appealing to the Judiciary and Ministry of Interior: To take firm, deterrent actions against goods smuggling and currency speculation.

The Bitter Truth

The bitter truth that no one talks about is that Libya has been divided for 15 years, despite pretenses and lies claiming the state is united (in name, flag, and anthem only).
The situation cannot continue for another year, and the Central Bank cannot face the coming challenges alone.

We are now closer to the situation of North and South Korea—sharing a name, yet each has its own authority, army, financial and technical institutions, and governance.

We must stop sugar-coating the situation and playing on emotions. We must take decisions that could be in favor of the state if we achieve real unification of state institutions—or else face a tragic future, should the division continue, with its inevitable result being a bloody confrontation no one desires.

Exclusive: Including $2,000 Personal Use Cards – Central Bank Issues New Regulations for Foreign Currency Sales

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Our source has exclusively obtained the new regulations for foreign currency sales issued by the Department of Currency and Banking Supervision at the Central Bank of Libya.

The new rules stipulate the following caps:

  • Commercial letters of credit: A maximum of $3 million USD (or equivalent in other currencies).
  • Service-related transactions: A maximum of $1 million USD.
  • Industrial imports: A maximum of $5 million USD.

For companies, small traders, and artisans, the maximum prepaid card amount for industrial, service, and commercial purposes is set at $50,000 USD.

Personal use:
Banks are authorized to approve foreign currency sales for personal purposes using the national ID number for every Libyan citizen aged 18 years and above, upon completing the required procedures via the foreign currency reservation platform for personal use across all operating banks in Libya. The maximum annual amount is $2,000 USD, or its equivalent in other currencies.

For students studying abroad, banks are allowed to sell foreign currency up to $7,500 USD per student annually.

For medical treatment abroad, the maximum allowed amount is $10,000 USD per person.

Additionally, the maximum amount per single transfer is capped at $1 million USD, or its equivalent in other currencies.

The Central Bank Takes Measures to Adjust the Exchange Rate… Lists the Reasons and Issues Numerical Warnings

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The Governor of the Central Bank of Libya issued a statement today, Sunday, regarding the Bank’s decision to adopt a series of strict measures, including a reconsideration of the exchange rate, in order to create balance in the economic sectors amid the lack of hope or prospects for unifying the dual government spending.

The Governor revealed that the volume of dual public spending during 2024 reached 224 billion Libyan dinars, including 123 billion in expenditures by the Government of National Unity, 42 billion in oil swaps, and about 59 billion in spending by the eastern-based Libyan government. This was matched by oil and tax revenues totaling 136 billion dinars. This level of spending created a demand for foreign currency amounting to $36 billion.

He continued: The expansion in dual public spending over the past years, and particularly in 2024, has led to a sharp increase in the money supply, which has reached 178.1 billion dinars. This is expected to result in several negative economic effects and poses serious challenges to the Bank due to the limited tools available to contain it. It will also create further demand for foreign currency, continued pressure on the Libyan dinar exchange rate in the parallel market, higher inflation rates, and risks to the public’s trust in the local currency.

He added that foreign currency revenues from oil exports deposited at the Central Bank amounted to only $18.6 billion in 2024, while expenditures in foreign currency reached $27 billion, leading to a significant gap between the demand for foreign currency and what is available. This has made it difficult for the Central Bank to define a clear exchange rate policy due to the increasing demand for foreign currency and the expansion of dual public spending.

He stated that if decisions to spend continue to be issued based on the 1/12 monthly budget formula in 2025 by both governments, and public spending continues at the same pace as in 2024, reaching 224 billion dinars, it will worsen the financial and economic situation of the country. This will present new challenges for the Central Bank, increase the demand for foreign currency, exacerbate deficits in the balance of payments and the general budget, and lead to a growing public debt.

He pointed out that data from the first quarter of 2025 clearly show the continuation of dual public spending, deficit financing, and increased demand for foreign currency, while oil revenues remain insufficient to cover the gap—something he described as dangerous. Foreign currency expenditures in Q1 amounted to around $9.8 billion (including $4.4 billion in letters of credit and transfers, $4.4 billion via business and personal-use cards, and $1 billion in government spending), equivalent to 55 billion dinars. Meanwhile, oil revenues and royalties deposited in the Central Bank amounted to only $5.2 billion by March 27, resulting in a deficit of about $4.6 billion in just three months. The situation could become even more critical if oil production or export levels decline due to any variable, or if global oil prices drop.

He added that the expansion of public spending, resulting from various decisions and laws, has increased the public debt held by the Central Bank in both Tripoli and Benghazi, reaching around 270 billion dinars—84 billion in Tripoli and approximately 186 billion in Benghazi. The total public debt is expected to exceed 330 billion dinars by the end of 2025 in the absence of a unified budget and with spending continuing at the 2024 rate. This is an extremely serious and unsustainable indicator and will cause major distortions in macroeconomic indicators.

He continued: To reduce the gap between supply and demand for foreign currency and the balance of payments deficit, the Bank was forced to use part of its foreign currency reserves temporarily to maintain exchange rate stability at acceptable levels, in order to preserve the prices of goods and services, and limit runaway inflation and the erosion of purchasing power. However, reliance on reserves is unsustainable. Therefore, the Central Bank had no choice but to reconsider foreign exchange regulations and the exchange rate in order to contain the consequences of unrestrained public spending and the absence of effective, goal-oriented macroeconomic policies.

The Central Bank affirmed that it continues to fulfill its duties in maintaining foreign assets at levels exceeding $94 billion, including $84 billion in reserves managed by the Bank, despite the significant challenges and the risky environment in which it operates.

It also noted that the inability to combat and curb the smuggling of goods and fuel has worsened the crisis by increasing the demand for imports and draining the foreign currency available to the Central Bank. Furthermore, the growing number of unregistered foreign workers and illegal migrants—estimated to cost around $7 billion annually—has increased the consumption of goods and demand for foreign currency in the parallel market, which has become a source of funding for illicit activities, money laundering, and terrorism financing.

Africa Intelligence: As the Oil Swap Deal Nears Its End, NOC Faces a Critical Period with No Alternatives Yet

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A report published by Africa Intelligence revealed that despite continued fuel imports in March, the National Oil Corporation remains unable to pay its bills, while the Central Bank of Libya is concerned about declining crude oil revenues.

The report stated that Masoud Suleiman, the head of the NOC, took a major risk on March 1 by officially halting the oil swap system, which allowed crude oil to be exchanged for imported fuel. The NOC has limited capacity to refine crude oil domestically.

The corporation now enters a dangerous period of uncertainty following the abrupt termination of the swap system, as no alternative financing mechanism has been agreed upon.

Suleiman’s decision to end the system came in response to a ruling by Libya’s Attorney General, Al-Siddiq Al-Sour, who called for its termination in January, arguing that it harmed state interests. The decision was followed by criticism from Libya’s Audit Bureau, which revealed that the swap system resulted in significant additional costs to the NOC’s budget, amounting to approximately $981 million in 2023.

Before the swap system was introduced in 2021 under former NOC chairman Mustafa Sanalla, the company had a budget for fuel imports managed by the CBL under government supervision. However, with the swap system now abolished, Suleiman has placed the responsibility of securing the necessary funding for fuel imports on Prime Minister Abdulhamid Dbeibah, who must provide funds as quickly as possible to avoid an economic crisis.

At the same time, the CBL must decide on the state budget, which may be divided between the two rival governments.

According to the report, no funding agreement has been reached yet. In its February report, the CBL did not mention any new budget allocation for fuel imports but clarified that fuel import bills had been paid since 2021 using the “swap system.”

For now, fuel deliveries have not stopped, and supplies remained stable in March. While the NOC awaits the necessary budget, it has been given three months to settle its bills, according to oil industry sources. The payments must be made by June, or Libya could face a fuel shortage that would impact the General Electricity Company of Libya (GECOL), which supplies power to the country’s infrastructure.

Meanwhile, Libyan crude oil sales have declined in recent weeks. The NOC, seeking to avoid panic, has attributed this drop to normal market fluctuations. However, the CBL issued a press statement on March 18 expressing concern over the current financial instability, which has led to weaker oil revenues and delays in collections.

Oil revenues remain Libya’s primary source of foreign currency, enabling the CBL to provide foreign exchange liquidity. According to CBL data, hydrocarbon export revenues between January and March ranged between $778 million and $1.7 billion, while foreign currency sales reached $2.3 billion during the same period.