A banking expert confirmed that the Central Bank of Libya’s decision to adjust the exchange rate of the dollar and raise its value against the dinar will directly lead to a decline in the purchasing power of the local currency, which will be reflected in a noticeable rise in the prices of imported goods for citizens.
It was explained that the decision was not arbitrary, but rather came as a result of pressing economic reasons, most notably the decline in dollar revenues due to falling oil sales, the erosion of reserves, and political division which led to inflated government spending without oversight, in addition to an attempt to reduce the gap between the official rate and the parallel market rate.
It was pointed out that the direct effects will appear in rising prices for food, medicine, spare parts, and electrical appliances, because the final cost is fully passed on to the consumer. It was also emphasized that the central bank’s ability to implement effective monetary reforms will remain limited in the absence of a unified budget and continued pressure on foreign reserves.
It was concluded by stressing that the central bank’s decisions, although they are the least bad option, will not radically fix the economic situation unless the political division ends and strict oversight of public spending is imposed, warning that continued open government spending without matching revenues will lead to deeper economic crises.
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 political conflict, particularly since 2011, leading to periods where rival governments have claimed control over its operations and assets.
dollar
The dollar is the official currency of the United States, established by the Coinage Act of 1792. Its history is tied to the Spanish dollar and it has become the world’s primary reserve currency.
dinar
The Dinar is a historic town in western Turkey, known in antiquity as Celaenae and later Apamea, which served as a significant military and trading center under Persian, Hellenistic, and Roman rule. It is notably situated near the headwaters of the Maeander River and was the site where the legendary flute player Marsyas was said to have challenged the god Apollo. Today, it functions primarily as a modern agricultural hub with remnants of its ancient past in the surrounding region.
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. Its cultural sites include the well-preserved Roman ruins of Leptis Magna, a UNESCO World Heritage site.
