For the first time in four years, Libya devalues its currency

On Sunday, Libya’s central bank declared a 13.3% depreciation of the dinar, bringing the exchange rate to 5.5677 to the US dollar with immediate effect.

Since the bank agreed to a depreciated exchange rate of 4.48 dinars to the dollar in 2020, this is the first official devaluation.

Right now, the dollar is worth 7.20 dinars on the parallel market.

Due to a crisis over central bank control that reduced oil output and exports, the dinar fell against the US dollar on the black market in September of last year.

Later in September, members of Libya’s competing eastern and western legislative bodies signed an accord that ended the crisis. A new central bank governor was appointed as a result of the accord, which was made possible by the UN.

The speaker of the parliament from the east lowered the levy on foreign exchange purchases from 20% to 15% in November. When consumers purchase foreign currency from commercial banks, the tax is applied to the rate.

Since an insurrection supported by NATO in 2011, Libya has been unstable, and in 2014, it divided into eastern and western groups, each of which is run by a competing government.

The central bank stated in a statement on Sunday that the two governments’ 2024 spending came to 224 billion dinars ($46 billion), of which 42 billion dinars were used for crude-for-fuel exchanges.

It stated that the public debt was 270 billion dinars and that, as a result of the absence of a unified budget, it might surpass 330 billion dinars by the end of 2025.

The deputy chief of the United Nations mission to Libya, Stephanie Koury, called on Libyan decision-makers to “urgently agree on a framework for spending in 2025 with agreed limits and oversight” in December.