In Libya, the situation remains at an impasse. It has been more than a month since the Libyan Presidential Council decided to dismiss the governor of the central bank, Al-Siddik al-Kabir, and to appoint another with a new management committee to lead the institution. A situation that is causing a major crisis in a deeply divided country.
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While the replacement of Al-Siddik al-Kabir is not the prerogative of the Presidential Council but of Parliament and the High Council of State, the current crisis at the Libyan central bank also has serious repercussions on the country’s economy. It has led to the closure of oil fields. The prices of essential products have soared and the Libyan dinar is depreciating against the dollar.
The dollar was traded on Monday, September 24, on the black market in Tripoli at 8.20 dinars. This is the worst exchange rate of the Libyan currency against the dollar since the fall of Muammar al-Gaddafi in 2011. The authorities were also forced to close al-Mouchir, the main exchange market in the center of the capital, to put an end to speculation. While at the official exchange rate, the dollar is exchanged for 4.7 dinars, many Libyans fear that the price of the dollar will soon reach 10 dinars.
Food prices up nearly 28% in one month
This unprecedented leap forward of the dollar on the unofficial market in Libyais likely to set in because of the concern over the lack of any agreement in the central bank crisis, which is making the market nervous and pushing prices soar. According to the Food and Agriculture Organization of the United Nations (FAO), prices have already increased by 27.8% in one month in Libya because of this situation.
According to several experts, the decline in oil exports plays a role in the depreciation of the local currency, which brings less foreign currency into the state coffers. Added to this is the failure of the central bank to control the black market for the dollar and impose a unified exchange rate.
According to experts, other negative effects are to be feared in the medium term. The former governor kept the Swift code of the central bank and in the absence of this code, Libya would no longer be able to import medicines or food products. Reconstruction and investment projects will also be affected.
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