The Tripoli based Libyan government issued a statement yesterday blaming the eastern based ‘‘parallel’’ Libyan government’s unaccountable spending for the weakness of the Libyan dinar’s foreign exchange rate and expensive cost of living for Libyan citizens.
The Tripoli government was responding to a statement on the same day issued by the Central Bank of Libya justifying its devaluation of the Libyan dinar. The CBL went on to devalue the Libyan dinar hours after issuing the long explanatory statement.
For what it is worth, the CBL, in its justification for devaluation, blamed both governments for uncontrolled spending and a lack of an effective macroeconomic policy. The CBL has been calling for a unified budget rather than dual budgets – but the political split between western and eastern Libya means that the CBL’s calls have consistently fallen on deaf ears.
In its statement, the Tripoli government clarified that the parallel government’s parallel spending in 2024 amounted to 59 billion Libyan dinars, spent outside the official state frameworks. This compares to 12 billion dinars spent on Chapter 3 projects only, according to the approved arrangements, according to the Central Bank’s report.
The statement emphasized that this spending constitutes a direct burden on the national economy, leading to the depletion of cash reserves, an increase in public debt, a deterioration in the value of the dinar, and an increase in prices, negatively impacting citizens’ living standards.
The government warned against the continuation of these financial violations, stressing the need to adhere to the official path to ensure transparency and protect economic stability in the country.
In a counter statement, the eastern government has refuted the Tripoli government’s attempt to blame it for Libya’s economic troubles.
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CBL devalues Libyan dinar by 13.3 percent to LD 5.56 per dollar
CBL’s latest revenues and spending data reveals a dinar surplus but a dollar deficit
