The question is no longer how many dollars the Central Bank injects
LIBYA – Presidential candidate Fadil Al-Amin said the dollar-leak problem is no longer how much hard currency the Central Bank of Libya pumps into the market, but where those dollars go after they are injected.
9.58 dinars to the dollar on the parallel market
In a Facebook post on his personal page titled “Dollar Leakage and the Collapse of the Dinar”, Al-Amin said that despite the sale of billions of dollars, the dollar’s rate on the parallel market had reached about 9.58 dinars — meaning, in his view, that increasing supply alone had so far failed to close the gap between the official and parallel rates.
Speculation, arbitrage and currency leakage
He argued that the large price spread, weak oversight of the end use of foreign currency, and domestic and foreign demand for the dollar could turn any new injection into an opportunity for speculation, price arbitrage and the leakage of hard currency abroad, rather than keeping it inside the Libyan economy and pressuring the market rate lower.
A market wider than 7 million Libyans
Al-Amin cautioned that the Central Bank of Libya may not merely be meeting the needs of a market of 7 million Libyans, but may in practice be funding a far wider market that extends beyond Libya’s geographical borders.
He likened the situation to trying to fill a tank with open holes at the bottom: the more that is pumped in, the more flows out unless the leakage channels are closed first.
Who is the final beneficiary of every dollar?
The question that should be put to the Central Bank, he said, is not only how many billions of dollars it has sold, but who the final beneficiary of each dollar was, and where that dollar ended up after 30 or 60 days.
A crisis of managing the dollar and the dinar together
In his assessment, Libya is suffering less from a dollar shortage than from a crisis in managing the dollar and the dinar together.
He explained that oil revenues enter in dollars, a large share is converted into public spending in dinars, and that dinar then chases the dollar again — prompting the Central Bank to sell more hard currency, some of which exits abroad.
He described this as a “closed loop” that begins with dollar inflows from oil, then dinar injection into spending, the chase for dollars, further dollar sales, and the exit of part of those dollars from the Libyan economy — arguing that this does not amount to a sustainable stability policy.
Demand channels stronger than supply increases alone
The dollar’s rise to 9.58 dinars on the parallel market despite all that has been pumped should, in his view, be read as a signal that demand, speculation and leakage channels have become stronger than a supply-increase policy alone.
Al-Amin concluded that what is needed is not only to pump more dollars, but to know where they go, who benefits from them, how much actually turns into goods and services, and how much is recycled into speculation or leaves Libya — before asking how many dollars were injected and how many remain in the country.
