The Tripoli based Libyan Minister of Economy and Trade, Mohamed Al-Hwej, today relented to protests by businesses through the various chambers of commerce by ordering the release of goods stuck in ports for about six months.
Letter No. 998.1.5 addressing the Director General of the Customs Authority orders the release of imported shipments of medicines, medical equipment, and maternal and child supplies.
The various chambers of commerce, led by Misrata Chamber, commanded a campaign against the Economy Ministry and the Central Bank of Libya (CBL) for holding goods at ports that had not been imported through letters of credits (LCs).
These have been paid for through hard currency purchased on the black-market. The CBL is attempting to reduce the black-market rate of the US dollar, currently at about LD 7.30 to the dollar. The official rate is LD 4.95/dollar. The high black-market exchange rate is having an inflationary effect, thereby reducing citizen’s purchasing power. This is proving embarrassing to the CBL and government.
However, there are imperfections in the market. Many products do not have official distributors in Libya or are not deemed important enough by ‘‘big business’’ to be imported through LCs. This gap is filled by smaller traders who fill the market – through hard currency purchased on the black-market. The route of the problem is that demand for hard currency is higher than the supply offered by the CBL.
Misrata Chamber today lauded businesses and chambers of commerce for standing up to the Economy Ministry and the CBL. They called the Ministry’s decision to hold goods at ports as arbitrary, reflecting negatively on the livelihood of merchants and the livelihood of ordinary citizens through price rises of goods and services.
