An informed source at the Central Bank of Libya told the Libya Herald today that the Bank plans to inject quantities of foreign currency into the market over the coming days. This move aims to stabilize the exchange market and boost the availability of foreign currency, the source claimed.
The dinar was quoted at LD 9.65/dollar today on the black-market foreign exchange. This is way over the ‘‘under LD 7.00’’ or the five percent margin promised by CBL Governor Issa.
However, the CBL source explained that these measures ‘‘follow improvements in various economic indicators and oil revenues, coinciding with understandings and agreements reached with economic partners that are expected to support the national economy’’.
Governor Issa’s London meetings?
It is unclear if this is referring to domestic partners and the much maligned (and US-brokered) Unified Spending Agreement or referring to international partners. There is some speculation this ‘‘understandings and agreements reached with economic partners that are expected to support the national economy’’ could be referring to meeting Governor Issa has had in London last week.
It will be recalled that Governor Issa held London meetings with the Governor of the Bank of England, the British Foreign Office and with representatives from major Arab, regional, and international financial and banking institutions.
Controlling Libya’s deficit
The source emphasized that the Central Bank of Libya prioritizes maintaining an adequate level of foreign currency reserves to ensure sustained monetary and financial stability, noting that the Bank is simultaneously working to keep the deficit within specific limits through the end of the year.
Talking the dinar up and the dollar down!
It must also be noted that it seems that after a brief hiatus, the CBL seems to be resuming its off-record media briefing campaign in favour of the Libyan dinar and against the dollar on the black-market foreign exchange.
It must be noted that its efforts in the past two months have not succeeded in bring the exchange rate within the Governor's publicly announced target.
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