Persistent gap between foreign-exchange demand and official supply
Libya – Economic expert Khaled Al-Kadiki said the dollar’s movement on the parallel market in recent weeks shows that the problem is no longer linked to speculation alone, but has become the result of a persistent gap between demand for foreign currency and the volume available through official channels, alongside factors related to public spending, the speed of access to foreign currency and the level of market participants’ confidence.
Gap of nearly 49% between the official and parallel rates
Al-Kadiki told Sputnik that, according to the latest available data, the dollar on the parallel market stood at about 9.56 dinars, against about 6.41 dinars on the official market as of 24 September.
He noted that the gap between the two rates reaches about 3.15 dinars per dollar, or nearly 49%, explaining that an importer needing 10,000 dollars would have to pay about 95,600 dinars at the parallel rate, compared with about 64,100 dinars at the official rate — a difference of nearly 31,500 dinars.
Rise of about 9.8% over six weeks
He said what stood out recently was the rise in the parallel-market dollar from about 8.71 dinars at the start of August to 9.56 dinars in mid-September — an increase of nearly 9.8% over about six weeks — reflecting continued pressure on the foreign-exchange market.
Central Bank measures and foreign-currency injections
On official measures, Al-Kadiki said the Central Bank of Libya had taken steps to increase the supply of foreign currency, including an announcement in July allocating one billion dollars for letters of credit and one billion dollars for personal purposes and bookings, as well as emphasising faster procedures for opening and executing letters of credit and longer hours for selling foreign currency to citizens.
He added that the continued rise in the parallel-market dollar despite these measures indicates, in his view, that injecting foreign currency alone is not enough to address the problem, and that a broader response is needed to the imbalance between demand for foreign currency and the capacity of official channels to provide it.
Heavy oil dependence and rising inflation
He noted that Central Bank of Libya data show total revenues in the first eight months of 2026 reached about 98.98 billion dinars, including 80.8 billion dinars from oil-sales revenues and 15.3 billion dinars from oil royalties, reflecting the Libyan economy’s continued heavy dependence on the oil sector.
He said the impact of a higher dollar shows clearly in goods and services prices and purchasing power, noting that Libya’s inflation rate reached about 14.3% in August 2026 compared with 13% in July, while food-price inflation rose to about 16.9%.
He stressed that a higher parallel-market dollar raises import costs before the increase gradually feeds through to the prices of a number of goods and services, especially given the Libyan market’s heavy reliance on imports.
Temporary drop does not fix the root problem
Al-Kadiki concluded that the problem is not the dollar’s price alone; rather, the exchange rate has become, in his view, an indicator of a broader imbalance between demand for foreign currency and the official economy’s ability to supply it in good time, warning that any temporary drop in the dollar may not be enough to prevent renewed pressure on prices and purchasing power unless the underlying causes of that imbalance are addressed.
