Libya begins implementing a new unified exchange rate

Libya begins implementing a new unified exchange rate

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                 On  Sunday,  January 3, 2021, the  Central  Bank of  Libya began implementing a new unified exchange rate across the country that was agreed upon last month after years of division between two rival branches on both sides of the conflict.

                                    <p> As part of the change, the internationally recognized  Government of  National  Accord suspended fees it imposed on foreign exchange transactions two years ago, bringing the official exchange rate closer to the black market rate.

The board of directors of the Central Bank agreed on a new rate of 4.48 dinars to the US dollar last month in its first full session in five years after the country was divided between warring factions in the West and East.

In Tripoli, the black market price reached five dinars to the dollar, after it fell last week towards the new official rate. “ We have to wait three or four months to see how things will go in the commercial banks,” said a currency dealer named Amer.

Malik Al-Fakhry, an electronics dealer in Benghazi, said he stopped dealing with banks after 2013 because he lost large sums of money when importing at the official rate and resorted to the black market. “ What matters most to the trader is stability,” he added. The new exchange rate implies an effective devaluation and means that the cost of imported goods is likely to rise.

This decision is wrong and it will harm the citizens more than it will benefit them, and it only satisfies the merchants,” said Hatem Al-Barghathi, who is also from Benghazi.

The decisions are part of a broader effort to establish peace, encourage the implementation of agreed reforms and cut the road to corruption. Although the fighting between the Government of National Accord and the forces of eastern Libya (the Libyan National Army) led by Khalifa Haftar stopped in June following the failure of his attack on Tripoli, the pace of the political solution is moving at a slower pace.

The ceasefire agreed upon in October was only partially implemented, the forces are still deployed on the battle fronts, the main highway on the coast remains closed and the mercenaries have not left.

Although a group of Libyans selected by the United Nations to chart a path towards democracy set a date for holding elections by the end of this year, they did not reach an agreement on forming a new unified government to oversee the transitional phase.



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