Libya’s currency, the dinar, has dropped to unprecedented levels, driven by a significant fall in oil revenues and worsening political instability. On April 6, the Central Bank of Libya (CBL) devalued the dinar by 13.3%, setting the official exchange rate at 5.5677 dinars per U.S. dollar. This marks the first devaluation since 2020. However, the black-market rate has surged to over 7.20 dinars per dollar, signaling deepening economic turmoil.
In a small sign of economic recovery, Harouge Oil has resumed production at its Amal Fields B-102 well, now pumping 1,500 barrels per day. Despite this, experts warn that isolated production increases cannot compensate for the broader decline in national oil revenues, which have been severely affected by political conflict and operational disruptions.
The devaluation has drawn sharp criticism from key government bodies, including the Presidential Council and the High Council of State. They argue that the move worsens Libya’s fiscal crisis and further weakens the purchasing power of its citizens. They point to the lack of a unified national budget and the rise of parallel spending entities as major factors contributing to the economic collapse. This criticism is likely to fuel further unrest, especially as rival political factions in eastern and western Libya continue to battle for control over state institutions.
Meanwhile, political groups in eastern Libya have shut down major oil fields in protest over disputes with the central bank, which has further reduced oil exports—the country’s main source of foreign currency. The CBL reports that public debt has reached 270 billion dinars, with projections suggesting it could exceed 330 billion dinars by the end of the year without urgent fiscal reforms.
As international observers call for political reconciliation and economic reform, Libyan officials face growing pressure to restore market confidence and avoid an even deeper crisis.
Adding to the complexity, Russia’s increasing influence in Libya has raised concerns. Moscow has aligned itself with eastern factions and deployed military assets to key locations, raising fears that Libya could become a new flashpoint in broader geopolitical tensions, alongside the ongoing threat of another civil war.
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