Libyan dinar strengthens on black market amid expectations of official devaluation

The Libyan dinar closed against the dollar on the Tripoli black market today at LD 6.10 – down one dinar from yesterday’s LD 7.15 to the dollar. At one point during the day it was LD 5.50 to the dollar.

In Benghazi, today’s rate was LD 6.80 – not as strong a rebound as in the capital, but also down from yesterday’s record high.

The official rate at present is LD 1.42 to the dollar.

The reason for the strengthening on the black market was widespread expectation that the Central Bank of Libya is about to announce a formal devaluation of the currency. Rumours were rife during the day that it would set a new official rate of LD 3.90 to the dollar and that banks would actually start accepting applications at the new rate in the next couple of days.

The expectation follows the London conference at the beginning of this month on supporting the Libyan economy at which devaluation was backed. The Presidency Council in particular wants it.

As a result of the conference, there has been little visible activity among the money changers in Tripoli’s Old Town and the Dahra district in recent days largely because people have been unsure whether the dinar would continue to plummet or rally as a result of a devaluation announcement.

That, however, did not stop the slide.

Yesterday, most Tripoli dealers once more shut their doors as the rate hit the record LD 7.15 mark, triggering fears that the Rada (“Deterrence”) forces would again started arresting them, accusing them of undermining the currency and profiteering.

They remained closed today.

There is anger and incomprehension at the slide, with many Libyans directing their resentment towards the money changers. Their main concern, though, is not obtaining dollars at the banks but getting dinars from their own accounts. As a result, most of their anger is directed at the Presidency Council, the Central Bank of Libya and the commercial banks and their staff, with the latter being accused of taking advantage of the situation.

There have been widespread reports of bank employees charging and then pocketing ten percent on any withdrawal.

There are also stories of militias employed as bank guards demanding money from customers to enter the banks.

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