Libya Devalues Dinar by 14.7% Amid Economic Strain

Libya’s central bank cut the dinar by 14.7% to 6.37 per dollar, marking the second devaluation in less than a year. Authorities cited unchecked public spending by rival governments and weaker oil prices as key drivers. The parallel market rate exceeded 9 dinars per dollar, widening exchange-rate distortions. The Central Bank of Libya (CBL) announced on Sunday, January 18, a 14.7% devaluation of the national currency to stabilize the economy amid rising spending by the two rival governments and falling international oil prices. The official exchange rate moved to 6.37 Libyan dinars per dollar from 5.43 previously. The decision marked the second devaluation of the dinar in less than a year. Authorities had already implemented a 13.3% adjustment in April 2025, which set the official rate at 5.56 dinars per dollar. The central bank said the latest move aimed to counter distortions in the foreign-exchange market. On the parallel market, the exchange rate has exceeded 9 dinars per dollar since Monday, January 12. The Central Bank of Libya explained the decision by citing “the persistent absence of a unified national budget, the unsustainable growth of public spending by the two governments based in the east and west of the country, the continued duplication of spending outside official financial frameworks, and ongoing political divisions with negative repercussions on the economic situation.” Moreover, the central bank pointed to external economic variables, particularly the decline in global oil prices and the resulting drop in oil revenues. Libya has faced prolonged political and security instability since 2011. Two governments have competed for power for several years. Prime Minister Abdelhamid Dbeibah leads the Tripoli-based administration in the west, which the international community recognizes. A rival government operates from Benghazi in the east and relies on the backing of Field Marshal Khalifa Haftar, who controls large parts of the country with support from foreign powers including Russia and the United Arab Emirates. Libya, which holds about 48 billion barrels of proven oil reserves, also struggles to secure stable revenue flows amid volatile hydrocarbon output and prices. The oil sector accounts for about 60% of gross domestic product, 90% of budget revenue, and 95% of export earnings.