Fears of losing Libya’s foreign currency reserves

Economists fear the finishing of foreign exchange reserves in Libya, as a result of the high rates of public spending and the increase in demand for foreign currency, knowing that the market demand reached 24.5 billion dollars last year, with a deficit of 1.6 billion dollars that was covered by foreign exchange reserves to maintain the stability of the exchange rate.

The increase in oil prices in the global market contributes to reviving the revenue of the Central Bank of Libya by billions of dollars, but economists considered that the decline in the reserves associated with the expansion of covering expenditures may lead the Central Bank to make an additional reduction in the price of the local currency, as the Board of Directors of the Central Bank of Libya previously set a unified exchange rate in the country at 4.48 dinars per dollar, instead of the old price of 1.4 dinars, a 70% devaluation of the currency.

In a statement to Al-Araby website, financial analyst Abdel Nasser Al-Shaibani considered that there are some positive indicators in the Libyan monetary cycle in terms of development projects accounting for 27% of last year’s expenditures, with the unification of public spending through one government, as changing the exchange rate achieved satisfactory results.

It is noteworthy that Libya’s reserves began to decline 10 years ago, as they amounted to 134 billion dollars in 2010. The Central Bank of Libya said that total spending during the past year amounted to 85.8 billion dinars, which is less than the allocated appropriation, estimated at 86.1 billion dinars.

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