Central Bank acts to support Libya’s dinar
Libya is trying to defend the dinar and regain control over the foreign exchange market after invoking a new package of monetary measures centred on dollar injections, tighter exchange management and easier access to foreign currency, as reported by Libya Herald and agencies on April 8th.
The package combines immediate support with a broader effort to reshape how foreign currency flows through the economy. It begins with an initial $1.5 billion injection and is due to continue through regular monthly injections until the end of the year.
It also expands cash dollar sales through banks and exchange companies, introduces more flexible transfer mechanisms for individuals, merchants, and firms, and aims to reduce the gap between the official and black-market rates to around 5%.
The governor also said an exchange rate of roughly 6.90 dinars to the dollar would be achievable if public spending is unified.
In April 2025, the central bank had devalued the dinar by 13.3%, while the combined spending of most of Libya’s rival governments in 2024 reached 224 billion dinars, and public debt stood at 270 billion dinars, with projections that it could rise further without a unified budget and adequate strategy.
This context helps explain why the latest package is being presented not simply as exchange rate support, but as part of a broader attempt to stabilise an economy shaped by divided authority and persistent pressure on state finances.
In Libya, pressure on the dinar has already become a problem for most families and their daily lives. Exchange rate weakness affects imports, purchasing power and confidence in state institutions, especially in an economy where access to foreign currency remains politically and socially sensitive.
By promising sustained dollar supply, tighter market regulation and a narrower gap with the parallel market, the authorities are trying to show that monetary policy can still impose order on a fragmented economic landscape.
Libya Herald plus agencies, maghrebi.org
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