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Libya devalues its currency for the first time in 4 years

Libya's central banks announced on Sunday a 13.3% drop in the value of its dinar currency, putting the rate at 5,5677 dollars to the dinar.

This is the first devaluation official since the bank agreed on a devalued rate of 4,48 dinars per dollar in 2020.

The current parallel market exchange rate for dinars is 7.20 dinars per dollar.

The black market for the dinar fell against the dollar in September of last year due to a crisis involving the central bank, which slashed the oil production and exports.

Later in September, the crisis was resolved following an agreement between representatives of Libya's rival east and west legislative bodies. The United Nations facilitated the agreement that led to the appointment of the new central bank governor.

The eastern-based speaker of the parliament reduced the tax rate on foreign currency purchases from 20% to 15% in November. When people purchase foreign currency from commercial banks, the tax is added.

Since 2011, when NATO supported an uprising, Libya has suffered from instability. This led to a split between the eastern and western factions in 2014. Each was governed by rival governments.

In a Sunday statement, the central banks said that the spending by the two governments for 2024 was 224 billion dinars (46 billion dollars), which included 42 billion dinars in crude-for fuel swaps.

It said that the public debt was 270 billion dinars and projected that it would exceed 330 dinars at the end of 2025 because of the lack of an unified budget.

Stephanie Koury (Deputy Head of the U.N. Mission to Libya) urged Libya's decision makers to "urgently come to an agreement on a framework to spend in 2025, with agreed limits and supervision". $1 = 4.8250 Libyan Dinars (Reporting and editing by Jaidaa Taka, Ahmed Tolba, and Ahmed Elumami)

(source: Reuters)