Libya devalues currency for first time in four years amid fiscal strain

Libya’s central bank devalued the country’s currency by 13.3 per cent on Sunday amid ongoing fiscal strain.

The exchange rate for the dinar has now been set at 5.5677 to the US dollar, effective immediately.

This marks the first official devaluation of the currency since 2020 when the rate was 4.48 to the dollar.

Meanwhile, the dinar continues to trade at a much lower rate on the black market.

This rate has been volatile in recent months following a power struggle over control of the central bank that slashed oil production and exports.

The crisis was resolved with a UN-brokered agreement between the eastern and western legislative bodies to appoint a new central bank governor.

Libya has been plagued by instability since a 2011 uprising which led to the establishment of the rival administrations.

On Sunday, the bank said 2024 spending by the two governments totalled $46 billion while public debt stood at nearly $56 billion.

But it warned this could exceed $68 billion if the two sides did not formulate a unified budget.

In December, the United Nations mission to Libya urged them to agree on a framework for spending this year with agreed limits and oversight.