TRIPOLI (LIBYA) (ITALPRESS/MNA) – The Central Bank of Libya (CBL) has issued a stark warning over the severe economic impact caused by irregular migration and undocumented foreign workers, revealing that the country is losing an estimated $7 billion annually due to these issues. The CBL noted that these factors have sharply boosted domestic consumption and driven up demand for foreign currency—primarily via the informal market—placing significant pressure on the country’s financial system.
“The uncontrolled presence of these migrants has contributed to the rise in unregulated economic activities,” the bank’s statement said. “These activities, including money laundering networks and the potential financing of terrorism, are posing serious risks to the country’s stability.” The CBL also pointed to the rampant smuggling of subsidized goods and fuel as a critical factor exacerbating the situation. Smuggling operations have led to a spike in demand for imports, forcing the central bank to dip into its dwindling foreign reserves in order to stabilize the value of the Libyan dinar.
This depletion of reserves, coupled with the growing demand for foreign currency, has placed immense pressure on Libya’s already fragile economy. In response to these challenges, the CBL devalued the Libyan dinar by 13.3%. This change translates to an official exchange rate of 5.5677 dinars per U.S. dollar. However, the black market rate remains significantly higher, with the dinar trading at 7.11 dinars per dollar, underscoring the widening gap between official rates and market realities.
The devaluation marks yet another challenge for Libyan citizens, many of whom are already grappling with the country’s ongoing economic instability. The CBL’s Governor, Naji Mohamed Issa, stated that further corrective measures may be necessary if the situation does not improve, warning that the absence of unified public spending policies was contributing to the economic turmoil. Issa also pointed to the persistent fiscal division between Libya’s eastern and western governments as a key factor driving inflation and instability. In 2024, the central bank reported that dual government spending reached a staggering 224 billion dinars, far surpassing total national revenues of only 136 billion dinars. As Libya continues to struggle with these pressing economic challenges, the future of the country’s financial system remains uncertain. The government’s inability to address the root causes of migration, smuggling, and fiscal fragmentation threatens to deepen the nation’s economic crisis.
– photo IPA Agency –
(ITALPRESS).
