Libya devalues dinar by 13.3% 

Libya’s central bank devalued the national currency by 13.3 per cent on Sunday, setting the official exchange rate at 5.5677 dinars to the US dollar, down from 4.48 dinars. This marks the first official adjustment since 2020.

The move comes as the parallel market rate hovers around 7.20 dinars to the dollar, reflecting continued pressure on the currency amid persistent political and fiscal instability.

In 2023, a crisis over central bank control disrupted oil production, Libya’s main revenue source, pushing the dinar lower in black market trading. Although rival factions reached a UN-brokered agreement in September to unify the central bank’s leadership, financial challenges remain. The eastern-based parliament reduced the foreign currency tax to 15 per cent in November, aiming to ease access to dollars through commercial banks.

According to the central bank, combined government spending from both administrations reached 224 billion dinars ($46 billion) in 2024, including 42 billion dinars for crude-for-fuel swaps. Public debt stands at 270 billion dinars and could exceed 330 billion by end-2025 without a unified national budget, the bank warned.

The UN has urged Libyan leaders to agree urgently on a 2025 spending framework with enforceable limits and oversight.

Attribution: Reuters
Subediting: M. S. Salama