By Libya Herald reporter.
Tripoli, 9 April 2017:
The Libyan dinar continued its plunge on the black market today, hitting the LD 8 mark by the time dealing stopped at the end of the afternoon.
In the late afternoon, it dropped to LD 7.90 to the dollar but hit LD 8.00 as it closed. However, dealers say that there has been little public buying in recent days and that dollar sales have been mostly down to commercial deals.
The latest move has raised fears that the dinar is on a slide that will take it to LD 10 to the dollar even sooner than has been predicted. Earlier this year, there were forecasts that if no currency exchange reforms were undertaken by the Central Bank of Libya (CBL), it could reach LD 10 by the end of 2017. When it hit seven to the dollar just 12 days ago, the timeline was shortened by financial observers and businessmen to the beginning of Ramada . Now it is feared that it could hit the LD 10 mark by the end of the month, and drop even further afterwards.
One of the main reasons for the plunge is the inability of so many importers to obtain letters of credit from the banks. Much of Libya’s food import bill is now paid using the black market.
There have been calls, notably from Mohamed Raied, the chairman of the Union of Chambers of Commerce, for the dinar to be devalued to LD 4 to $1 help end the slide. However, financial experts point out that, regardless of whatever rate the dinar is officially pegged at, the currency will continue to drop and the black market thrive until the CBL ends its restrictions on hard currency exchange.
Ironically today’s new low comes as commercial banks start to implement the CBL new policy of allowing people to buy up to $400 at slightly over the official rate of LD 1.42.
In Benghazi today, the Wahda Bank started taking applications to buy $400 from those who surnames begin with an “A”. The bank had initially said that it would accept applications online but there was a technical problem so it then announced that it would accept them in person in alphabetical order. However, one applicant who today applied for $400 for each of the eight members of his family told the Libya Herald that he had not been told when the dollars would be available.