TRIPOLI/BENGHAZI: Libya’s currency adjustment last month has helped ease a liquidity crisis across the country but the continued scarcity of cash dollars means the black market still thrives.
Libya has been split since 2014 between warring western and eastern administrations with rival factions seizing control of key economic institutions.
As the eastern banking system was cut off from the Central Bank of Libya (CBL) in Tripoli, different black market exchange rates emerged across front lines, both very different to the official rate, and making dollars unaffordable to most Libyans.
As part of an economic track of a UN-led peace process that also includes efforts to choose a new interim government this week, negotiators agreed a new unified exchange rate, bringing the official rate down towards black market rates.
It has allowed Libyans to access dollars through commercial banks by charging debit cards at the new official rate, and many have put dinars into the banking system.
“Deposits have reached about 500 million-600 million dinars within weeks,” said Fawzy Abdul Salam al-Shuweish, assistant general manager at Jumhouria Bank.
“Liquidity is very satisfactory and now there is a cash flow in the market,” he added. Branches that were previously given 500,000 dinars to distribute were now receiving 5 million.
Though the situation is better across Libya, the scale of the improvement has not been even. Some banks and some areas have more access to cash than others. However, the long lines of people waiting outside for money have shrunk. “Wahda Bank has raised the withdrawal limit,” said Salem al-Houni, the bank’s marketing manager in Benghazi.
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