Libya Devalues Dinar by 13.3% Amid Economic Crisis
New Exchange Rate and Currency Restrictions
The Central Bank of Libya has devalued the dinar by 13.3% against foreign currencies, setting a new exchange rate of 5.56 Libyan dinars to the US dollar.
Alongside this significant devaluation, the bank has implemented strict new currency controls:
- Annual foreign currency allocation for personal use reduced from $4,000 to $2,000
- Study abroad students limited to $7,500 annually
- Medical treatment abroad capped at $10,000
Reasons Behind the Economic Measures
The Central Bank cited Libya’s political division as a key factor, stating these measures aim to “create economic balance amid challenges posed by the lack of unified spending between Libya’s two rival governments.”
Officials emphasized the policies are designed to:
- Achieve financial sustainability
- Stabilize prices
- Ensure banking system integrity
- Protect foreign exchange reserves
Growing Public Debt Crisis
The bank revealed alarming financial statistics:
- Combined public debt at Tripoli and Benghazi banks: ~270 billion dinars
- Projected debt by end of 2025 if spending continues: >330 billion dinars
- 2024 public spending: 224 billion dinars ($36 billion forex demand)
Call for Anti-Smuggling Measures
Authorities urged judicial and interior ministries to:
- Implement stronger anti-smuggling measures
- Combat black market currency speculation
Warning of Economic Consequences
The Central Bank warned that continued current spending practices could:
- Further deteriorate Libya’s financial situation
- Erode confidence in the dinar
- Increase pressure on parallel market exchange rates
This article summarizes an original report from Libyan Express. Full credit to the original source.