Libya worries over dinar dollarization

The decline in the value of the Libyan dinar against the dollar in the black market has reignited the debate over the possibility of liberalizing the exchange rate and floating the currency in Libya. Reports indicate that the exchange rate for the dollar in the parallel market reached approximately 9.80 dinars before dropping to 9.61, with a gap of more than 3 dinars between the official rate and the parallel market, which increases import costs and affects the prices of goods. Experts believe that implementing a currency float requires comprehensive economic reforms, and the current political situation in the country hampers the execution of such a step, especially amid rising living costs and inflation, which stood at 14.3% in August. Analysis suggests that liberalizing the exchange rate could lead to sharp fluctuations and negatively impact import operations, particularly in the absence of a competitive foreign exchange market. There are also concerns that floating the currency without supportive measures could jeopardize price stability and living standards.

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