Home / news / Libya adjusts and unifies the currency exchange rate .. What are the effects of that on the country’s economy?

Libya adjusts and unifies the currency exchange rate .. What are the effects of that on the country’s economy?

Yesterday, the Central Bank of Libya began implementing the unification of the Libyan currency exchange rate, after the members of the Board of Directors of the Central Bank of Libya agreed to amend the exchange rate against foreign currencies.

According to the Central Bank of Libya’s publication, the selling price of the local currency becomes: 4.46 Libyan dinars to one US dollar, and 5.45 dinars per euro, while today one US dollar is sold for more than 5 Libyan dinars in the illegal parallel market.

The Libyan currency exchange rate approved by the Central Bank of Libya was 1.40 Libyan dinars to one US dollar.

The Central Bank of Libya stated that the new price will be applied to all governmental, commercial and personal purposes and uses of foreign exchange, provided that foreign exchange is sold for personal purposes by banks to the citizen at a maximum of 20 thousand dollars per person from the age of 18 years.

For its part, the Presidency Council of the Government of National Accord decided to suspend the work of the decision to impose fees on foreign exchange sales for a period of 3 months, which can be extended, provided that the decision of the Board of Directors of the Central Bank of Libya No. 1 of 2020 regarding the amendment of the exchange rate of the dinar is implemented.

Negative situations

Citizen Ayoub Al-Sadiq emphasized that adjusting the exchange rate of the dinar may negatively affect the living condition of the citizen, in light of the recent instability of the Libyan market and the lack of cash liquidity.

Al-Sadiq added to Al-Jazeera Net that “adjusting the exchange rate needs to raise the monthly salaries of citizens that we get from the state, because the salaries of workers in the state have not changed and market prices have increased exponentially for years.”

Al-Sadiq, who is from the outskirts of Tripoli, stated that his monthly salary of 800 Libyan dinars does not exceed 170 US dollars at the new exchange rate, and this is not enough to meet the needs of his family of 6.

Al-Sadiq called on the Government of National Accord to develop radical solutions to the suffering of citizens, such as monitoring the high prices in the local market and not leaving the citizen victim to annual decisions taken by some officials in order to achieve the largest percentage of gains.

Good move

Member of the Supreme Council of State, Kamel Al-Jatlawi, believes that the move to adjust the exchange rate is the beginning of economic reform and stability, in light of the presence of good precautions for the Central Bank of Libya, which will work to manage the new exchange rate with minimal losses.

A member of the economic committee in the council said, “This new amendment needs a rational government headed by a person with a liberal economic thought, which requires an integrated economic reform, which includes the abolition of subsidies and their legalization, the separation of government ownership of companies and the payment of family allowances and the value of support for people with limited income.

In his statement to Al-Jazeera Net, Al-Jatlawi stated that the aim of adjusting the current exchange rate is to pump 10 billion Libyan dinars to collect the cash mass in the citizens, estimated at 45 billion dinars, by reducing the exchange rate to reach an actual balance.

Al-Jatlawi pointed out that the prices of various commodities will not increase much after the Central Bank of Libya’s decision to adjust the exchange rate, because most of the imported goods are priced according to the price of the US dollar in the parallel market.

Rising prices

The Libyan businessman Imran al-Feminine considered that the adjustment of the foreign exchange rate against the Libyan dinar will lead to a greater rise in the prices of food commodities, which will affect the lives of citizens directly.

He added that “unifying the exchange rate is a first step towards unifying ending the division of the Central Bank’s board of directors … and stabilizing prices in the market is hampered by the existence of the parallel market that also controls the increase and decrease in prices, and its impact on the security, economic and political situation in the country.”

Member of the Supreme Council of State, Kamel Al-Jatlawi, confirmed that the move to adjust the exchange rate of the dinar is the beginning of economic reform (Reuters)

Al-Femin told Al-Jazeera Net that the provision of dollars from the Central Bank of Libya to government institutions, merchants and citizens enhances the national economic activity and contributes to reducing the gap between the official exchange rate in the Central Bank of Libya and the illegal exchange rate in the parallel market.

He added, “What concerns us now is the importance of maintaining price stability, because any other sudden change within a short period of time directly affects prices in the market.”

He pointed out that the stability of the Libyan market requires unified institutions that work together to put in place complete financial arrangements for the state, in coordination with chambers of commerce and businessmen associations.




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