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Al-Sharif Writes on Calls to Float the Libyan Dinar and Let Its Value Be Determined by Market Supply and Demand Without Central Bank Intervention

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Economic expert Idris Al-Sharif wrote that as long as the Central Bank remains the sole monopolistic source of selling foreign currency in the market, and since the Libyan economy is one-sided, relying on a single export commodity sold in dollars, there is no suitable method for determining the exchange rate other than the (fixed exchange rate) set by the monopolist (the Central Bank), which adjusts it whenever it wishes.

Al-Sharif asked: “Who would demand the Libyan dinar if it were floated and its value left to supply and demand mechanisms? Do we have other export commodities besides oil (monopolized by the state, priced, and sold in dollars) that could generate demand for the dinar from foreign buyers? Would floating the exchange rate under Libya’s current conditions create or increase the production and export of such commodities?“

He continued: “Do we currently have tourism that could generate demand for the dinar from foreign visitors? Do we have inflows of foreign investment that could create demand for the dinar? Do we have expatriate workers or businesspeople transferring foreign currency into the country and thereby creating demand for the Libyan dinar?“

Al-Sharif explained that this means there would be a large supply of dinars without corresponding demand, which would cause the dinar’s value to collapse entirely if it were floated. “Is there a simpler explanation than this for those calling for immediate floating without understanding or awareness of the most basic laws of economics—chief among them the law of supply and demand?“

He added that even other oil-producing countries that have significantly diversified their economies and enjoy political stability, strong institutions, and highly efficient legislation—such as the UAE and Saudi Arabia—still operate under a fixed exchange rate system and have not considered floating their currencies to date. “Yes, we do have an exchange rate problem, caused by decades of misguided economic policies (worsened by political turmoil), but the solution cannot be limited to this proposal, which would undoubtedly worsen the problem rather than solve it.“

Exclusive: Central Bank of Libya to Cover $1.5 Billion in Letters of Credit and $400 Million for Personal Purposes on Monday

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The Central Bank of Libya revealed exclusively to our source that tomorrow, Monday, September 1st, will see the coverage of letters of credit worth $1.5 billion, in addition to $400 million allocated for personal purposes.

The Central Bank added that their value will be paid to commercial banks.

Exclusive: Central Bank: “Here’s Our Advice to Small Traders and Others Regarding the Dollar… New Measures Coming in October”

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The Central Bank of Libya exclusively told our source: “We do not advise small traders and others to buy dollars before the end of September, when the withdrawal period for the 20-dinar note ends.”

The Central Bank also confirmed exclusively to our source that it is preparing to launch new tools and measures in the upcoming October.

Exclusive: Including the Agreement on Gradual Tax Cancellation… Central Bank Reveals Key Details to Sada About Governor’s Meeting with House Speaker

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The Central Bank of Libya exclusively told our source: “An agreement was reached between the Governor of the Central Bank of Libya and the Speaker of the Libyan House of Representatives in Benghazi to support the Central Bank’s efforts to achieve financial and monetary stability, in line with the bank’s plan to manage the overall economic situation.

The agreement includes starting the gradual cancellation of the tax on foreign currency sales in October, postponing consideration of the submitted budget that does not align with current economic indicators until conditions are suitable for approving a realistic budget that supports real economic growth, and moving forward in regulating the local market for goods and services in accordance with anti-money laundering and counter-terrorism financing controls.

It also includes settling past negative economic accumulations, completing the withdrawal of the 20-dinar note by the end of September, supporting the Central Bank’s plan to enhance electronic payment services and digital transformation, and strengthening the Libyan dinar’s value through the activation of exchange offices, tax cancellation, and improving oil revenues.”

Exclusive: The Central Bank Instructs Banks to Prepare Their Systems to Test the “Instant Salary” Project Ahead of Direct Salary Disbursement

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Our source obtained a correspondence from the Central Bank of Libya to the directors of commercial banks regarding the upcoming end of August, in which the Central Bank announced its support for the “Instant Salary” project aimed at facilitating the direct transfer of government sector employees’ salaries to their beneficiaries.

The Central Bank requested that bank directors prepare the testing environment for instant payments, the national switch, and the banking system starting from the date of this letter, ensuring they remain available at all times in the coming days. The “Instant Salary” project will be tested to disburse salaries to all accounts that have been verified by the end of the working day on Thursday, August 21. The Central Bank also requested the designation of a contact point to follow up on the readiness of the testing environment and to address any issues that may arise.

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Commenting on the Central Bank Governor’s Circular to Exchange Companies… Wali: “What We Hear and See Is Not as It Seems”

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Economist Ibrahim Wali wrote an article in which he said:

Through memos, articles, videos in newspapers, TV channels, and on social media, the Governor of the Central Bank of Libya has appeared warning and threatening exchange companies, declaring that he will not tolerate violations of legal regulations—which could even lead to the revocation of some of the 230 existing licenses. He also confirmed lowering the Libyan dinar exchange rate to 7 dinars, vowing to fight the parallel market with the force of law and security authority. He has met with the Attorney General about illegal speculation, as well as with the acting Minister of Local Government, the head of the Municipal Guard, and the Ministry of Interior, to support efforts in monitoring, prosecuting, and penalizing violators, including exchange companies, while ensuring they hold valid operating licenses. Even gold traders and their shops are under the watch of the Municipal Guard and the Ministry of Interior.

Through these measures, I believe the Governor is attempting to bring the parallel market to the Central Bank’s table, confronting them with reality by expanding licensing of exchange companies and engaging directly with them to control the parallel market.

However, these strict measures are a double-edged sword: either the expansion of exchange companies—now 230—carries significant risks without standards and controls, effectively turning them into substitutes for commercial bank branches conducting multiple banking operations; or, the Governor has a future vision where this large number will shrink by half, as weaker companies unable to comply with the Central Bank’s regulations are eliminated under heavy monitoring by the Municipal Guard, police, and regulators. The UAE offers a precedent: 140 brokerage licenses were granted within three years, but this dropped to 74 after stricter standards were enforced.

There are four categories of brokerage companies in such systems:

  • Type 1: Cash exchange (buying and selling currency only).
  • Type 2: Handling transfers.
  • Type 3: Processing salary transfers for employees.
  • Type 4 (newest): Linked to electronic payments.

Unfortunately, none of these categories exist in a structured way within Libya’s exchange companies.

So, what are the monetary, financial, and commercial arrangements to ensure the success of the Central Bank’s measures—especially with the Ministry of Finance (responsible for revenues and parallel spending) and the Ministry of Economy (responsible for prices of food, medicine, exports, and imports)? What procedures will exchange companies follow in their professional work, without a clear legal and administrative framework to define requirements and operations in line with the Central Bank’s objectives?

There will be many serious challenges, unless the Central Bank effectively controls money supply. We are talking about 153 billion Libyan dinars—the steadily growing money supply. The monetary base keeps expanding and demanding dollars, while government spending is uncontrolled under two rival administrations.

I support the Central Bank in strengthening our national currency and reducing the dollar’s value. Libyans long for the days when one dollar equaled 30 qirsh, and when the dinar had strong purchasing power backed by ample foreign currency reserves. Sadly, what we hear and see is not the reality: the Central Bank faces a shortage of foreign currency, and the state relies on oil for over 80% of its income. If oil falls below $70 per barrel, the state cannot even pay salaries.

Thus, a fluctuation of 20 qirsh in the dollar’s value depends on information available to speculators and the Central Bank’s secret strategy against them. The exchange rate is determined here—but this is not a short-term issue, it requires long-term solutions. If the Central Bank delays support to banks and exchange companies, the dinar’s value will decline, harming both the financial market and citizens. We want to strengthen the dinar under continuous monetary stability—this is what citizens want and what the Central Bank aims for.

If the Central Bank maintains and defends the official exchange rate of 5.45 LYD/USD, but then adds a 15% levy—raising the effective rate to 6.45 LYD/USD in violation of court rulings—and manages to reduce the wide gap between the official and parallel rates, then credit is due to the Central Bank, its Governor, its Board of Directors, and its staff.

May God aid the Central Bank of Libya, unite it with the Ministry of Finance and the Ministry of Economy, and protect it from obstructers—especially the two parliaments and the reckless spending of two rival governments. (One hand alone cannot clap.)

Al-Bouri: Without Controlling Public Finances, the Central Bank Has Only Two Options: Either Tap Reserves or Devalue the Currency

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The Italian news agency Nova reported on Thursday, citing former Chairman of Assaray Bank for Trade and Investment, Naaman Al-Bouri, that despite Libya’s vast oil resources, the country spends more foreign currency than it earns from oil sales. If the tax system is not restored, the Central Bank of Libya will be forced to devalue the Libyan dinar to address the growing foreign currency deficit.

In an exclusive interview with Nova, Al-Bouri explained that Libya’s foreign currency expenditures exceed its oil revenue. With a deficit exceeding $5 billion in the first seven months of the year, such a financial measure becomes necessary if fiscal reforms are not adopted, alongside the limited revenue and public expenditure system in Libya.

He pointed out that Libya cannot borrow from international markets and relies on oil sales for approximately 95% of its revenue. To meet the increasing expenditure requirements of the western and eastern governments, the Central Bank has only two options to maintain economic activity: either devalue the Libyan dinar or withdraw from its sovereign reserves, which total around $84 billion.

The latest Central Bank report confirms the imbalance between revenues and expenditures highlighted by Al-Bouri: in the first seven months of the year, dollar revenues from crude oil sales and royalties totaled $13.9 billion, compared with foreign currency investments and obligations of $19.1 billion. This difference—technically known as the balance of payments—amounted to a cumulative deficit of $5.2 billion by the end of July, similar to the deficit recorded in June.

Al-Bouri emphasized that the key condition to resolve Libya’s public finance problem is a political solution. The existence of two governments in Tripoli and Benghazi prevents the creation of a unified state budget. To achieve this, institutions in the west and east must first be unified, after which a single budget can be established—a situation that has persisted in Libya for years and has also hindered the Central Bank from controlling itself.

He added that the Central Bank uses two different financing mechanisms for the competing governments: the Tripoli government relies mainly on oil revenue, while the Benghazi government relies on monetary financing, i.e., issuing public debt. This dual mechanism results from massive public spending and mutual distrust, as neither administration wants to disclose to the other how resources are spent. Consequently, the Central Bank branches in Tripoli and Benghazi effectively operate as separate institutions, each serving its respective government.

Exclusive: Central Bank Circulates Guidelines to Banks on the Roles of Licensed Exchange Companies and Offices

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Our source obtained exclusively a circular from the Central Bank of Libya to banks regarding the activities conducted by licensed exchange companies and offices in foreign currency transactions.

These activities include buying and selling foreign currency with a maximum margin of 7%. Licensed exchange companies and offices are also authorized to process transactions through banks’ point-of-sale (POS) terminals—owned by Libyan banks—using cards issued by local or foreign banks.

The deducted amounts from both local and foreign cards are converted into Libyan dinars and deposited into foreign currency accounts dedicated to licensed activities. Exchange companies can also purchase foreign currency from accounts held by individuals or legal entities at banks operating in Libya and use cash against accounts of the exchange companies and offices themselves.

All operations must comply with the instructions outlined in Circular A.R.M.N No. (2025/20), ensuring that the selling price does not exceed a 7% profit margin above the Central Bank of Libya’s selling rate.

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Exclusive: Central Bank Authorizes Banks to Allow National Industrial Companies to Transfer Loan Installments from Foreign Banks or Financial Institutions

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Our source has obtained a copy of the Central Bank of Libya’s instructions to commercial banks, permitting national industrial companies operating in Libya—and meeting all legal requirements—to transfer installments of loans obtained from foreign banks or financial institutions.

This is conditional on obtaining prior approval from the Banking and Currency Supervision Department for transferring these installments and fulfilling all stipulated requirements and documentation.

Exclusive… Central Bank Circulates to Banks Allowing Foreign Currency Account Holders to Deposit up to $10,000 or Equivalent in Other Currencies

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Our source has exclusively obtained a circular from the Central Bank of Libya addressed to banks, permitting holders of foreign currency bank accounts—individuals and entities—to deposit cash into these accounts up to an amount of $10,000 (ten thousand U.S. dollars) or its equivalent in other foreign currencies.

According to the circular, if the amount to be deposited exceeds $10,000 or its equivalent in other foreign currencies, a currency disclosure form issued by Libyan border points must be provided. There is also a requirement to adhere to all due diligence procedures and ensure enhanced due diligence in accordance with anti–money laundering and counter–terrorism financing regulations.

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Exclusive: Central Bank: “The Letters of Credit Reservation System Shows Excellent Results with 2,900 Companies Registered for $2.5 Billion”

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A senior official at the Central Bank of Libya exclusively told our source: “The letters of credit reservation system has shown excellent results, enabling 2,900 companies to register for a total value of $2.5 billion. This was previously unavailable due to corruption, favoritism, and the domination of certain companies over banking transactions, which excluded some small traders and others.”

The source added: “Today, you can make reservations from your home without doors or phones being closed on you. Large approvals have been granted today, and the full reserved amount will be processed with approvals starting Sunday, according to the order of reservation.”

Exclusive: Central Bank to Sada — Faster Pace in Coming Days to Approve All Requests on the New Letters of Credit System

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The Central Bank of Libya revealed exclusively to our source that approvals for the new letters of credit system have already begun, with customers receiving messages today regarding the approvals that were executed.

According to the Central Bank, the pace will be faster in the coming days to approve everything loaded onto the system and referred to banks in order of priority.

Exclusive: Central Bank Expects Dollar to Drop to 7.5 Next Week After Injecting $1.5 Billion Through the Forex System

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A senior official at the Central Bank of Libya stated exclusively to our source:
“We expect the dollar to fall below 7.50 LYD next week following the injection of $1.5 billion through the foreign exchange system.”

According to the source, this move will support the upcoming meeting with exchange companies and offices next Sunday, during which the Central Bank will present its vision to support this sector.

Exclusive – Central Bank to Sada: If This Plan Is Implemented, We Will Be Able to Eliminate the Foreign Exchange Tax… Learn More

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The Central Bank of Libya revealed in an exclusive statement to our source that it is currently studying a mechanism for the operation of exchange companies and offices, by providing them with foreign currency both in cash and through direct transfers.

The Central Bank stated that once this package succeeds — including the withdrawal of the 20-dinar banknote, the launch of exchange offices, and the regulation and control of public spending — the exchange rate of the dollar will fall below 7 dinars. At that point, the Bank will be able to eliminate the 15% foreign exchange tax.

Exclusive: The Central Bank Allocates 1.5 Billion Dollars to Settle Credits and Personal Purposes Ahead of the System Launch Next Sunday

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The Central Bank of Libya revealed in an exclusive statement to our source that it has allocated an amount of 1.5 billion dollars to settle the value of approvals for credits and to sell them to banks for a value of one billion dollars next Sunday.

This is in preparation for the start of operations of the system designated for credits, with a value of 500 million dollars allocated for personal purposes.