As the Libyan dinar plunges beyond the LD 8 per US$ mark, causing much alarm in Libya, an undisclosed ‘‘official source’’ at the Central Bank of Libya told Libyan Arabic language news site, Tabadul, that the Central Bank of Libya (CBL) is closely monitoring the conditions of the foreign currency parallel / black-market.
Currency speculation, money laundering and withdrawal of the 20 dinar note
Tabadul reported that the source explained that there are several factors that caused the rise in currency prices, including speculation, money laundering, and exploiting the announced deadline to withdraw the currency of the “20 dinars” denomination from circulation.
Ani-money laundering measures, Visa and Mastercard suspensions
The CBL source reportedly added that the introduction of international anti-money laundering measures and the follow-up of the movement of international (Visa and Master) cards has increased fears of a decrease in supply in the market. It will be recalled that Libyan media has reported that Visa and Master cards are suspending some cards issued by Libyan banks for questionable spending.
Large public spending and the state deficit
The anonymous CBL source is also reported to have blamed the continuation of public spending at large rates and the increase in the level of the state deficit for increasing uncertainty in the market and traders’ expectations of further appreciation in currency prices, stressing that the CBL monitors the market conditions and covers all requests and needs.
The CBL’s countermeasures as of October – to eliminate black-market and corruption
The CBL official reportedly revealed that the CBL plans to contain the market, which will start from the beginning of next October after the end of the 20 dinars denomination speculation, stressing that the market will be regulated and the sale of currency to exchange companies will resume after putting in place the appropriate mechanism in the meeting scheduled to be held on 3 August between the CBL and foreign exchange companies, and “eliminating the black market and corruption before the end of the year.”
CBL to sell US$ 4 million monthly to newly licenced FX bureaux
The CBL official further pointed out that the CBL is expected to sell three million dollars per month to exchange companies, and one million dollars per month to offices and transfer them to their accounts with the CBL, and allow the sale of currencies through quick transfers and card recharges, buying and selling cash according to a specific profit margin, and estimating the value according to market conditions, demand and supply.
