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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.

Al-Shahoumi Writes an Article Titled: “The Dilemma of the Central Bank of Libya”

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Dr. Suleiman Salem Al-Shahoumi, Professor of Finance and Investment and Founder of the Libyan Financial Market wrote an article saying:

The Central Bank of Libya, a historic and pivotal institution within Libya’s economic structure, is managing the country’s monetary policy amid an extremely delicate and highly turbulent situation both domestically and internationally. Even after addressing the primary demand of unifying its administration and bridging the long-standing division, the process of monetary and banking unification, along with the integration of accumulated public debt and monetary easing measures, remains stalled without tangible progress reflected in the bank’s core accounts and periodic reports.

Despite the formal unification, the Central Bank still finds itself dealing with two separate governments, each with its own budgetary requirements for operational and investment spending, without a unified national budget framework. This has resulted in uncontrolled public expenditure, weakened financial oversight, and an unregulated fiscal policy. Consequently, the monetary supply in Libya has expanded beyond the economy’s absorptive capacity, exacerbating inflation and undermining the Central Bank’s ability to stabilize the national currency.

Historically, the Central Bank has provided financial facilities to both governments without a unified or structured framework, justifying its actions but failing to enforce comprehensive fiscal discipline. Even internationally mediated public expenditure meetings, including U.S. and international efforts, have failed to introduce concrete measures for controlling Libya’s fiscal and monetary chaos. Instead, these discussions have primarily focused on managing foreign exchange and enhancing transaction transparency, neglecting the crucial need for regulating oil and gas revenues. The lack of transparency in revenue collection and distribution among the National Oil Corporation, the Libyan Foreign Bank, and the Central Bank has further complicated the situation.

The call for a unified national budget remains urgent, despite the prolonged delay in its approval and implementation. The challenge, however, extends beyond mere expenditure control—it also involves ensuring transparency and smooth revenue flow to the Central Bank.

In my view, adopting a nominal budget could help the Central Bank regulate public spending and assess its ability to respond to the current monetary expansion. However, such a measure would be insufficient as long as both governments continue to demand unrestricted spending. The prevailing approach places all financial pressure on the Central Bank, forcing it to either inject liquidity or restrict electronic funds.

Expecting the Central Bank to reduce the money supply under such unstable financial and monetary conditions is neither realistic nor effective, given the lack of functional monetary policy tools and coordination with governments to regulate trade policies and curb excessive imports. Without financial policy instruments that promote investment-driven demand, excess liquidity will continue fueling demand for foreign currency rather than supporting productive economic growth.

The real dilemma lies in the Central Bank’s ongoing readiness to finance the uncontrolled spending of both governments, often without a structured framework or a clearly agreed-upon mechanism. In each instance, the bank resorts to deficit financing, which depletes foreign currency reserves and exacerbates economic instability. The parallel market, highly adept at exploiting the Central Bank’s monetary policy tools, operates independently, further constraining the bank’s ability to defend the national currency and ensure financial stability.

Half-measures cannot restore balance or build a sustainable economy. Introducing a new tax on foreign exchange transactions, for instance, does not reduce the money supply but rather provides additional government revenue—at best, it merely covers fiscal deficits, ultimately leading to an increased money supply. This scenario benefits competing governments while encouraging dollar speculation, worsening Libya’s financial crisis, and leaving the Central Bank caught between a rock and a hard place, gradually losing its ability to manage monetary policy effectively and contribute to economic stability.

Exclusive: Banking Source Denies Reports of Central Bank Considering Tax Rate Hike

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Our banking source revealed that reports about the Central Bank studying a tax rate increase are false, clarifying that such a decision falls under the jurisdiction of the House of Representatives, not the Central Bank.

The source further explained that the exchange rate is determined by the government, not the Central Bank, as the Libyan dinar’s value against the dollar is a direct result of the economic policies implemented by successive governments. If spending increases while revenues decline, the dinar weakens, and vice versa.

Exclusive: Central Bank Sends New Cash Shipment from Mitiga Airport to Benghazi

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The Central Bank of Libya exclusively revealed to our source that it has sent a new cash shipment today from Mitiga Airport in Tripoli to Benghazi, carrying 60 million dinars designated for the Benghazi branch’s vaults.

The bank continues to dispatch cash shipments successively to ensure liquidity reaches all Libyan cities, as part of its planned strategy to provide cash flow, following the directives of Governor Naji Mohammed Issa and his deputy.

After Warning Against Double Spending and Depleting Foreign Currency Reserves… Several Experts Support Central Bank Measures and Propose Solutions

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In an important statement published on its page, the Central Bank of Libya revealed that foreign exchange sales executed between March 1 and March 17, 2025, amounted to approximately $1.1 billion for personal purposes and $1.2 billion for documentary credits, bringing total sales to $2.3 billion. Meanwhile, oil revenues deposited into the Central Bank during the same period amounted to only $778.0 million. The bank emphasized that it is facing significant challenges due to declining public revenues caused by reduced oil revenues and delays in their collection, which increase pressure on foreign reserves. Additionally, the continued rise in dual government spending increases demand for foreign currency, threatening financial sustainability and posing challenges to the bank’s efforts to maintain economic stability.

Our banking source revealed that, apart from the decline in revenues flowing into the Central Bank, another issue is the rising demand for foreign exchange. This is due to pressure on the foreign exchange sale system, as individuals log in from multiple devices simultaneously under one identity, enabling reservations worth millions within a short period. This negatively affects the system’s performance and the reservation process.

The head of the Accounting Department at the Libyan Academy, Dr. Abu Bakr Abu Al-Qasim, commented to our source, saying: “Do not leave the Central Bank alone.” He added that the weekly and monthly reports of the Central Bank serve as warning messages to all Libyans. It is as if the bank is telling us: The Central Bank is still standing alone against reckless governments with inflated and uncontrolled spending and against the National Oil Corporation, which operates unchecked, controlling oil revenue flows without oversight or accountability, in clear violation of the laws and regulations governing the state’s public finances.

He continued: It is also fighting against speculators leading this war against the dinar. Today, it is necessary for everyone, without exception—whether elite or ordinary citizens—to stand firmly with the Central Bank of Libya’s management in its battle to defend the strength of the struggling dinar.

Former member of the Central Bank’s Exchange Rate Committee, Musbah Al-Akari, stated on his official Facebook page: Since the arrival of the new administration at the Central Bank, it has been making great efforts to restore some strength to the Libyan dinar against foreign currencies. Despite some victories, it has found itself in a real battle alone, without support—even from the citizens themselves.

He added: The Central Bank found itself between two governments, each claiming sole legitimacy and authority over expenditures. One government spends here, the other spends there, and everyone knows that increased spending means injecting new money into the market, leading to increased demand for foreign currencies.

Al-Akari further explained: Despite the Central Bank spending $7 billion—equivalent to 40 billion Libyan dinars—in three months, the exchange rate continues to rise.

He pointed out another issue: Citizens rushing to banks with cash to request personal-purpose cards, which they then use for activities other than what the Central Bank intended—essentially speculating on their own currency without any national concern for the consequences. They themselves will ultimately suffer from the rising prices.

Al-Akari proposed solutions rather than further complicating the crisis, stating:

  1. Developmental spending is not a problem even if it creates a deficit, as it contributes to economic growth.
  2. The real spending issue lies in operational expenditures, which have surpassed 85 billion dinars (including salaries, children’s and spouse allowances, and the second chapter of the budget). These expenses drive up foreign exchange rates.
    • A suggested solution is reducing salaries by 15%, without affecting low-income salaries (below 1,000 dinars).
    • Eliminating barter transactions immediately.
  3. Implementing strict monitoring mechanisms for personal-purpose cards and documentary credits to ensure foreign exchange is used for its intended purpose, imposing severe penalties on those who falsify information.
  4. Reforming fuel subsidies, as the current system results in a loss of 45 billion dinars annually, benefiting smugglers at the expense of honest citizens. The solution involves:
    • Gradually removing subsidies and setting fuel prices at 1 dinar per liter.
    • Establishing two oil refineries to achieve self-sufficiency, financed through private sector investment in collaboration with banks.
  5. Separating Chapter III of the budget from the state budget to transform development projects (such as roads, electricity plants, oil refineries, and major agricultural initiatives) into investment projects funded by the private sector and financial institutions under the supervision of reputable foreign companies.
  6. Improving media discourse to educate Libyans on the shared responsibility for addressing economic challenges, avoiding fearmongering, and promoting productivity instead of negativity.
  7. Leveraging Libya’s wealth by diversifying sources of income through industry, agriculture, and tourism investments.
  8. Reducing embassy staff abroad to the minimum necessary.
  9. Requiring Libyan embassy employees abroad to deposit two months of their salaries annually in Libyan banks, receiving local currency in exchange.
  10. Imposing a rule for Libyans with foreign memberships to deposit at least 70% of their foreign currency earnings into Libyan banks in exchange for local currency.

Economist Anas Shneibish also provided a set of solutions in a statement to our source:

Urgent Solutions:

  • Controlling the exchange rate: Through a calculated intervention by the Central Bank to regulate foreign exchange flows and curb speculation.
  • Rationalizing public spending: By implementing strict policies to monitor and limit government expenditures.
  • Accelerating the collection of oil revenues: By restructuring sales operations and renegotiating with partners to ensure steady cash flows.
  • Strengthening foreign reserves: By imposing stricter controls on documentary credits and unnecessary transfers.

Long-Term Solutions:

  • Diversifying income sources: By supporting industries, agriculture, and tourism to reduce dependence on oil.
  • Encouraging local and foreign investment: Through economic reforms and ensuring political and security stability.
  • Modernizing the banking system: By updating monetary policies and promoting financial inclusion.
  • Boosting domestic production: By providing incentives to national industries to decrease reliance on imports.

Economic expert Abdul Hamid Al-Fadhil told our source: “Where is this massive amount of dinars coming from to demand such unprecedented levels of foreign currency for the fourth consecutive month?

From last December until March 12, total foreign currency usage amounted to approximately $11.5 billion, which translates to around 65 billion dinars requested in foreign exchange.

I cannot find an explanation for this unprecedented and alarming demand, except for parallel spending of extremely large sums by the parliament-appointed government, which may be sourced from (the use of commercial bank deposits + printing currency)!”

Thus, disclosing the amounts spent by the Hamad government and their sources of funding, as well as unifying public spending, has become a matter of utmost urgency that cannot be delayed.”

Economic expert Saber Al-Wahsh told our source: “Uncontrolled spending has pushed the demand for foreign currency to $2.3 billion, while revenues stood at just $778 million, resulting in a deficit of $4 billion in just two and a half months.”

He added: “Based on the latest statement and the Monetary Policy Committee meeting, I believe the central bank will resort to adjusting the exchange rate, thinking it is a solution, but it is merely a temporary fix.”

He continued: “The correct short-term solution is to unify and regulate public spending, ensure the stability of foreign revenues, and avoid deficit financing under any circumstances—except for salaries.”

Exclusive: Central Bank Governor Briefs Aguila Saleh on Challenges Facing the Libyan Dinar, Stresses the Need for a Unified Budget

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The Central Bank of Libya exclusively told our source that during an urgent visit, the bank’s governor provided a briefing to the Speaker of the House of Representatives, Aguila Saleh, on the latest economic and financial developments in the country. The governor outlined key challenges hindering the CBL’s efforts to strengthen the Libyan dinar, citing rising dual public expenditures, inefficiency in spending, declining oil and sovereign revenues, and a lack of coordination between policies.

During the visit, the governor reaffirmed that the CBL is working professionally and with its full staff to address these challenges. He also stressed the need for coordination between fiscal, trade, and monetary policies, emphasizing the importance of a unified budget to facilitate the bank’s operations.

Exclusive: Central Bank: New Shipment of Printed Currency Arrives from Abroad and Will Be Distributed to Commercial Banks in the Coming Days

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A senior official at the Central Bank of Libya exclusively told our source that, as part of the bank’s plan to ensure cash liquidity across all Libyan cities, a new shipment of printed currency has just arrived from abroad.

The shipment has been transferred directly to the Central Bank to support the Issuance Department’s reserves, in preparation for distribution to commercial bank branches across Libyan cities and villages in the coming days, based on demand, ahead of the Eid al-Fitr holiday.

Additionally, shipments will continue to arrive in succession, per the directives of CBL Governor Naji Mohammed Issa, until the cash liquidity shortage is fully resolved.

Exclusive: Zarmouh Proposes Solutions to Avoid Devaluation of the Dinar

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Professor of Economics at the Libyan Academy, Dr. Omar Othman Zarmouh, told our source that the Central Bank of Libya’s statement clearly indicates that the amount of foreign currency received from the National Oil Corporation is significantly lower than the demand, resulting in a foreign exchange deficit.

He continued: “The statement suggests that, to stabilize the exchange rate, the Central Bank is willing to cover the deficit by withdrawing from its reserves.”

He added: “My comment on this is that while this approach is sound and appropriate in the short term—since reserves exist for this purpose—the Central Bank’s role in ensuring monetary stability should involve adding to foreign exchange reserves during surplus periods and withdrawing from them during deficits.”

He emphasized: “In the long term, however, the concern is that a persistent deficit could become chronic, making the devaluation of the dinar inevitable.”

To avoid the need for devaluation, the following policies must be adopted:

  1. Increase oil production and exports.
  2. Require the National Oil Corporation to transfer oil revenues immediately to the treasury account at the Central Bank of Libya without any delays.
  3. Prohibit the National Oil Corporation from importing fuel through barter agreements, as these are inefficient, prone to corruption, and violate the state’s financial system law.
  4. Adopt a unified state budget that aligns with Libya’s economic capacity to prevent inflation, ensuring it is categorized by sectors, municipalities, and institutions, regardless of political and institutional divisions.
  5. Ensure that funding sources, expenditures, and their objectives—including development spending—are clearly defined and subject to oversight by the Audit Bureau, the Administrative Control Authority, and the Anti-Corruption Commission. Additionally, official institutions should issue quarterly reports to track revenues and expenditures.

Exclusive: Abulqasim: Do Not Leave the Central Bank Alone

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The head of the Accounting Department at the Libyan Academy, Dr. Abu Bakr Abulqasim, told our source: “Do not leave the Central Bank alone.” He added that the Central Bank’s weekly and monthly reports serve as warning messages to all Libyans, as if the bank is telling us: The Central Bank remains standing alone, facing unrestrained governments with excessive and unregulated spending, and the National Oil Corporation, which operates unchecked, controlling the flow of oil revenues without oversight, in blatant violation of laws and regulations governing the state’s public finances.

He continued: “It is also facing speculators who are waging this war against the dinar. Today, it is imperative for everyone—both elites and the general public—to stand firmly with the Central Bank of Libya in its battle to defend the strength of the fragile dinar.”

Foreign Currency Sales Rise While Libyan Oil Revenues Decline… “US Website” Reveals Economic Impact in Libya

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The American website APA reported that the Central Bank of Libya has expressed concerns over a significant gap between foreign currency sales and oil revenues in mid-March, placing increasing pressure on the country’s reserves and economy.

The website confirmed that between March 1 and 17, 2025, the Central Bank of Libya sold $2.3 billion in foreign currency, while oil revenues during the same period amounted to only $788 million. This stark contrast highlights the growing pressure on Libya’s financial stability.

The website pointed out that despite these challenges, the Central Bank of Libya remains committed to ensuring regular foreign currency supplies to meet local market needs, while simultaneously maintaining financial sustainability and foreign reserves.

The article further noted that data from January and February 2025 show a rising trend in foreign currency usage, with $5.53 billion used, marking a 395% increase compared to the same period last year. Of this usage, 53.7% was private sector spending, and 43.1% was related to letters of credit.

The website concluded that the combination of rising demand for foreign currency and declining oil revenues is exerting significant pressure on the overall economic balance in Libya, signaling potential future economic challenges.