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Tag: Libyan Dinar

Exclusive: Al-Harati: “Protecting the Dinar is a Shared Responsibility, Not a Sovereign Privilege”

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Legal advisor Hisham Al-Harati spoke exclusively to our source, stating that while the Central Bank of Libya is actively confronting speculation attempts and leading clear monetary reform steps, continued laxity by some public bodies in controlling spending poses a direct threat to the stability of the national economy.

He added: “The Central Bank’s policies cannot succeed amid the ongoing depletion of public funds, unplanned expenditures, and the random financing of obligations that lack productive or regulatory frameworks.“

Al-Harati reminded that: “Violating budget laws and spending outside legal frameworks is not merely “administrative negligence,” but amounts to financial crimes for which officials are held accountable before the judiciary.“

He further emphasized that legislative and executive authorities are required to activate oversight and stop approving irregular expenditures that undermine the effectiveness of monetary policy and increase pressure on the national currency.

He continued: “Institutional solidarity is not a political slogan, but a legal and constitutional obligation imposed by the nature of the current phase and the scale of the risks.“

Obstructing the Central Bank or weakening its corrective measures, he said, constitutes a serious breach of the principle of inter-authority integration in managing public affairs.

He concluded: “The continuation of this course will result in explicit legal consequences for officials across various authorities, and citizens will end up paying the price for an unjustified economic recklessness.“

Al-Zantouti Writes: Corruption and the Dinar’s Decline Are Directly Linked – It’s a Chronic Disease

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When we speak of corruption—whether within a kleptocratic, oligarchic, or any other system—it encompasses both administrative and financial corruption. In fact, financial corruption is often the consequence of administrative corruption. The more deficient an administrative system is in its regulatory tools—especially law enforcement, justice, and accountability—the more widespread financial corruption becomes.

It’s evident that Libya is suffering from an administrative and financial corruption crisis unmatched in modern times. This is not an exaggeration but is supported by numerous investigative studies, articles, financial and economic indicators, and published data over recent years. I’ve referred to these in several of my past articles. Libya consistently ranks among the worst globally in transparency and corruption indices. If not among the top five, we are certainly among the top ten most corrupt and mismanaged nations.

Recently, many analysts have discussed the causes behind the Libyan dinar’s devaluation and potential solutions, often citing unregulated spending, subsidy reform, budget unification, and redefined monetary and fiscal policies. While I agree with the theoretical foundation of these suggestions, I am personally convinced that none of these solutions will work in an environment deeply infested with administrative and financial corruption like Libya’s.

As long as corruption persists, so will division, reckless spending by both governments, unregulated fuel subsidies leading to billions in smuggling, inflated public sector wages, and a “my share vs. your share” mentality. Mismanagement of resources and public expenditure will continue, legislative conflicts will remain unresolved, and regionalism will deepen. The struggle for power and wealth will rage on—all to foster a breeding ground for corruption.

Those benefiting from corruption are deliberately intensifying these negative dynamics to maintain their grip on public funds.

One of the main drivers of the dinar’s depreciation is the overwhelming demand for dollars at any cost by corrupt individuals laundering their illicit funds and transferring them abroad. Regardless of the official exchange rate, there will always be a parallel market with higher rates because these actors are willing to buy dollars at any price. Thus, the market in Al-Mushir (Tripoli’s currency black market) is governed by unregulated supply and demand, heavily influenced by dollar traders who control how much (illicit) currency is available and sell it to fellow corrupt players.

Tragically, this harms ordinary citizens who need dollars for essential purposes like medical treatment, forcing them to buy at much higher black market rates. May God help them.

The bitter truth is that the root cause of our current crisis is widespread corruption. Corrupt figures cling to power, create conflict, and even instigate wars to sustain a corruption-friendly environment. If we don’t uproot corruption and its perpetrators, the dinar will continue to fall. The more corruption increases, the more the dinar will plummet to satisfy the corrupt elite’s hunger for dollars and their quest to transfer money abroad—abandoning the weakened dinar in the process.

I’ll end with an innocent question: If we take the $10 billion spent on letters of credit and personal transfers in the first quarter of this year—equating to about $1,500 per citizen, or $7,500 per average household (5 people), roughly 50,000 LYD over three months or 17,000 LYD per month—did we actually import goods or services worth this amount? Did every household consume that much in imports?

The simulation is illustrative, but it strongly indicates that the answer is no. Much of this $10 billion never returned to Libya—it remains abroad in the accounts of those individuals. Some of it may have even returned to the black market to profit off exchange rate differentials. I’m not generalizing, but our corruption has surpassed imagination. Damn the corrupt, and may God aid the honorable Libyans fighting them.

God Almighty said: “Indeed, Allah does not like corruption”, and “Indeed, Allah does not like the corrupt”, and “Allah does not amend the deeds of the corrupters.”
O Allah, make us among Your righteous servants and not among the corrupt, and may You establish justice upon the corrupt.

Exclusive: Central Bank: “There Is Still a Chance to Improve the Dinar’s Value by Removing the Tax, and We Will Present a Swift Reform Plan”

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The Central Bank of Libya told our source in an exclusive statement: “We have taken measures to correct the exchange rate, setting it at 5.56 dinars per dollar, while maintaining the 15% tax.”

The bank added: “There is still an opportunity to improve the value of the dinar by removing the tax—if reform measures and spending unification are implemented. The Central Bank will present a rapid reform plan, and we will not allow speculators to continue operating in the market.”

The statement continued: “We hope all parties will cooperate quickly. The opportunity for reform is available, and improving the situation is possible despite local and international challenges.”

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.”

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.

Shneibish: The Stability of the Libyan Dinar Between Present Challenges and Future Solutions

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Written by Anas Shneibish: The Stability of the Libyan Dinar Between Present Challenges and Future Solutions

The Libyan economy is under increasing pressure due to the continuous decline in oil revenues and the sharp rise in demand for foreign currency. A statement issued by the Central Bank of Libya on March 18, 2025, revealed that foreign currency sales reached $2.3 billion in the first 17 days of the month, while oil revenues transferred to the bank did not exceed $778 million. This clear imbalance between spending and revenue poses a threat to financial sustainability and weakens the state’s ability to maintain exchange rate stability.

Current Economic Challenges

The ongoing financial crisis stems from several interconnected factors, including:

  1. Declining oil revenues and delays in collecting proceeds.
  2. Rising government spending, which depletes foreign reserves.
  3. Increased demand for the dollar, contributing to the exchange rate hike in the parallel market, fueling inflation and higher prices.
  4. Weak domestic production, leading to heavy reliance on imports, exacerbating the foreign currency crisis.

Short- and Medium-Term Solutions

To ensure the stability of the Libyan dinar, effective strategies are needed at both short- and long-term levels:

Immediate Solutions:

  • Exchange rate control: A well-planned intervention by the Central Bank to regulate foreign currency flows and curb speculation.
  • Public spending rationalization: Implementing strict policies to monitor and limit government expenditures.
  • Accelerating oil revenue collection: Restructuring sales processes and negotiating with partners to ensure a steady cash flow.
  • Strengthening foreign reserves: Imposing strict oversight on letters of credit and unnecessary transfers.

Long-Term Solutions:

  • Diversifying income sources: Supporting industries, agriculture, and tourism to reduce dependence on oil.
  • Encouraging local and foreign investment: Improving the economic environment and ensuring political and security stability.
  • Developing the banking system: Modernizing monetary policies and promoting financial inclusion.
  • Boosting domestic production: Facilitating national industries to reduce reliance on imports.

Conclusion

The stability of the Libyan dinar and financial balance requires swift and well-balanced measures that combine urgent financial reforms with a long-term strategic vision. Without decisive steps to regulate monetary and financial policies and coordination among all political, financial, and economic entities, the Libyan economy will remain vulnerable to further fluctuations, threatening citizens’ livelihoods and local market stability.

Abu Snina: “No Stability for the Libyan Dinar Exchange Rate Without Oil Revenues”

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The economic expert, Mohamed Abu Snina, wrote an article stating:

In Brief, the focus of Libyan decision-makers, those shaping the current landscape and challenging authority, remains limited to finding short-term solutions to economic problems such as the exchange rate, public spending, liquidity, fuel subsidies, salaries, and oil production. These areas suffer from recurring distortions that merely reflect symptoms of the deeper issue plaguing the economy: the heavy reliance on crude oil export revenues, a rentier culture, and the resulting deadlock. This perpetuates a vicious cycle of dependency, sustaining a mono-economy with no clear vision for reform.

The salary bill inflates public expenditure, leading to exchange rate instability. Exchange rate instability puts pressure on reserves, which in turn restricts foreign currency use. This limitation reduces liquidity, increases the black-market exchange rate, and subsequently leads to a liquidity crisis. The public’s lack of trust in the banking sector worsens, increasing reliance on public expenditure. Allocating funds to develop the oil sector comes at the expense of other development projects. Thus, addressing any existing economic problem or distortion often exacerbates another, because the root cause is structural. There is no public spending or budget funding without oil revenues.

There can be no stability for the Libyan dinar exchange rate without oil revenues. No letters of credit for importing goods, supplies, and services can be issued without oil revenues. Salaries for approximately 2.8 million Libyans depend on oil revenues, as do fuel supplies for electricity and transportation. Fuel subsidies, which already strain the state’s budget, also rely on oil revenues. Even the development of the oil sector itself is unattainable without these revenues.

Decision-makers ignore the fact that oil is an exhaustible resource that may deplete within less than 25 years—a brief period in the lifespan of a state. Additionally, oil is losing market share to clean and alternative energy sources in the medium term, a reality given little attention. Oil prices are on a downward trend, and the exploitation of oil revenues fails to consider the rights of future generations, regional development needs, or the global climate crisis.

Why have successive governments failed to create and implement a serious strategy for economic diversification? Instead, they merely extinguish recurring crises. The Libyan Sovereign Wealth Fund, valued at over $60 billion, has yet to contribute to financing the state’s budget deficit, contrary to its foundational goals. Meanwhile, Libya’s other natural resources remain unutilized and ignored due to the prevailing conditions. Exploiting these resources requires investing oil revenues strategically, but those revenues are barely sufficient to cover salary bills.

There is no choice, priority, or alternative—before it is too late—to save Libya’s economy, the state’s future, and the coming generations other than by diversifying income sources, restructuring the national economy, halting the expansion of consumer spending and subsidies, breaking oil’s dominance over the economy, and reforming institutions while combating corruption—all within a defined timeframe.

Exclusive: Central Bank Source: “We Continue to Support the Dinar’s Value… and Here Are the Upcoming Possibilities”

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A source at the Central Bank of Libya exclusively revealed to Sada Economic that the bank continues its efforts to support the value of the Libyan dinar.

The source added that all possibilities are on the table, including a further reduction in the foreign exchange tax or its complete elimination by the end of the year.

In a Statement to Sada: Husni Bey Reveals Central Bank Reserves and the Fate of the Dinar

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Libyan businessman Husni Bey stated in an exclusive comment to our source:
“The Central Bank of Libya undoubtedly has the capacity to defend the dinar at any rate it deems appropriate. The bank possesses gold and currency reserves exceeding $90 billion (with gold reserves over $10 billion and dollar reserves amounting to $80 billion). These high reserve levels allow the Central Bank to safely reduce the dollar exchange rate to below 5.000 LYD, thereby strengthening the purchasing power of the Libyan dinar.”

He added: “Let us conduct a simple simulation. It can be said that the official and parallel exchange rates could drop by 250 dirhams for every 5% reduction in the fee. The Central Bank can defend the dinar at around 5.000 LYD/USD, even if this requires using up to $5 billion in reserves annually, with an oil price of $75 per barrel for several years.”

From the consumer’s perspective, Bey explained, a reduction in the exchange rate positively impacts prices and services in the medium and long term. Such a reduction could pressure the prices of durable and consumable goods to decline over time. However, in the short term (3 to 6 months), it may cause some disruptions.

In the short term, Bey highlighted that exchange rate reductions could create distortions in the overall economy, leading to losses for many service providers and suppliers. This may also reduce supply, causing an imbalance between supply and demand, which could temporarily drive prices up instead of down due to traders’ reluctance to lower prices.

However, he emphasized that prices will stabilize and decrease in the medium and long term, likely beyond seven months. Economic balance is always governed by the “supply and demand” equation—if supply decreases, prices will rise even if the exchange rate drops.

Regarding the phased reduction of the fee by 5% or its potential cancellation by the end of the year, Husni Bey noted that this creates uncertainty among traders and speculators. As a result, traders may hesitate to import, and suppliers may cease deliveries, leading to reduced availability of durable and consumable goods. This decline in supply, coupled with steady demand, could drive prices up in the short term, further fueling inflation for 3 to 6 months.

He elaborated: “The mere suggestion of reducing the fee by 5% since mid-October 2023 and talks about canceling it entirely by 15% at the end of December 2023 alarm suppliers, discouraging them from taking risks. This is expected to shrink imports, with losses of around 5% by December 2024 and up to 15% in the first quarter of 2025 for those importing now at a fee-inclusive rate of 15%.”

In conclusion, he stated: “Reducing the exchange rate or the fee remains positive in the medium and long term (beyond seven months), even if it has negative effects in the short term, up to six months. The success or failure of monetary policies ultimately depends on fiscal policies and government spending. The government must avoid ‘expanding public spending,’ ‘financing budgets through deficits,’ and should adhere to the Central Bank’s monetary policies to defend the exchange rate determined by its board of directors.”

He concluded by saying: “My personal opinion is that the ideal rate the Central Bank can defend without depleting reserves is 6.000 LYD/USD. If public revenue is supported through reserves, the Central Bank could defend a rate below 5.000 LYD/USD, provided oil production exceeds 1.3 million barrels per day, gas production surpasses 1.4 billion cubic feet per day, and oil prices remain above $75 per barrel.”

Al-Harshawi Explains to Sada the Reasons Behind the Weak Libyan Dinar

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Jalal Al-Harshawi, a Libyan affairs expert at the Royal United Services Institute, explained to our source on Wednesday that there are several reasons behind the weakness of the Libyan dinar, and that parallel printing of dinars is not the main cause.

Al-Harshawi confirmed that the primary reason for the dinar’s weakness is the large amount of barter transactions conducted by the National Oil Corporation.