Libya’s currency markets concluded trading this week with a new and record expansion in the gap between the official and parallel market rates, with the difference reaching 2.75 dinars. This level reflects direct pressure on citizens’ purchasing power and an additional increase in import costs.
🔹 Reading the Numbers
According to available data, the comparison shows a sharp contrast in pricing levels:
- Official Rate: 6.35 dinars per US dollar, according to the Central Bank of Libya’s bulletin, with the official announcement of the personal purposes tax rate still absent.
- Parallel Market: The dollar closed at levels of 9.10 dinars, according to parallel trading platforms.
- Price Gap: The disparity reached 2.75 dinars, one of the highest levels recorded recently.
🔹 Central Bank’s Decision to Lower the Official Exchange Rate
This widening came after the Central Bank of Libya announced a 14.7% devaluation of the dinar against the Special Drawing Rights (SDR) unit, making the dinar’s value 0.1150 SDR instead of 0.1348 SDR. This raised the new official rate to approximately 6.40 dinars per US dollar.
🔹 Central Bank’s Steps to Address the Market
The Central Bank announced a series of moves, most notably:
- Obtaining – for the first time in over 15 years – international approval to import $600 million in cash monthly.
- The imminent resumption of work on the Personal Purposes system with an initial quota of $2,000, granted directly by the Central Bank and withdrawable in cash through banks and exchange companies.
- The readiness of licensed companies and offices to operate through their systems, with the dollar being provided to them directly in cash.
Libya
Libya is a North African country with a rich history rooted in ancient civilizations like the Phoenicians and Romans, followed by centuries of Arab and Ottoman influence. In the modern era, it was an Italian colony before gaining independence in 1951, later becoming known for Muammar Gaddafi’s lengthy rule from 1969 until the 2011 revolution. The country is home to UNESCO World Heritage sites, such as the ancient Greek city of Cyrene and the Roman ruins of Leptis Magna.
Central Bank of Libya
The Central Bank of Libya is the primary monetary authority of Libya, established in 1956 to issue currency and manage the country’s financial reserves. Its history has been deeply affected by the nation’s political conflicts, with rival administrations since 2014 both claiming control over the institution and its critical assets.
US dollar
The US dollar is the official currency of the United States, established by the Coinage Act of 1792. It evolved from a system based on Spanish milled dollars and became the world’s primary reserve currency following the Bretton Woods Agreement in 1944.
Special Drawing Rights (SDR)
Special Drawing Rights (SDR) is an international reserve asset created by the International Monetary Fund (IMF) in 1969 to supplement its member countries’ official reserves. Its value is based on a basket of five major currencies: the U.S. dollar, euro, Chinese renminbi, Japanese yen, and British pound sterling.
dinar
The Dinar is a mountain range in western Algeria, part of the larger Atlas Mountain system. Historically, it has been a significant geographical feature for indigenous Berber communities and later played a role in the region’s resistance during the French colonial period. The area is known for its rugged terrain and traditional villages.
