Libya advances in the reconstruction process with the change of the Dinar exchange rate

The Central Bank of Libya decided on Wednesday to change the exchange rate of the local dinar against the US dollar, with the aim of introducing much-needed economic reforms in the country after years of armed conflict and political instability, which have destroyed the Libyan economy and left local banks illiquid. The previous exchange rate was approximately 1.4 dinars to the dollar.

"The Bank's Board of Directors held the first meeting of the year 2020 to discuss a report prepared on options for changing the exchange rate of the Dinar. The new exchange rate is 4.48 dinars to 1 US dollar," the bank said in a statement. The rate will come into effect on 3 January 2021 and will be available for all government, commercial and personal uses, they said.

The exchange rates and the Central Bank of Libya were divided just like the country itself. That of the National Accord Government (NAG), on the one hand, and that of the Libyan National Army (LNA), on the other. Unification is expected to help stabilise the dinar and combat corruption.

The acting head of the UN mission in Libya (UNSMIL), Stephanie Williams, confirmed that the international audit of both branches of the Central Bank of Libya, which is part of the process of unifying the bank and fully restoring national accountability mechanisms, is currently under way.

The ceasefire between the Tripoli and Tobruk governments decreed in October has enabled the Board of Directors of the Central Bank of Libya to meet for the first time in five years and oil production to resume.

This is good news for a country which, since the fall of Muammar al-Qadhafi, has lived in constant political instability that Jihadist groups and mafias have taken advantage of. The warring parties agreed to abandon the armed struggle, which triggered a peace process that in theory should end with the holding of elections on 24 December 2021.

As the UN mission in Libya stresses, it is crucial to revive the war-torn economy by implementing economic reforms and restoring confidence in the institutions responsible for managing it.

"Now is the time for all Libyans, particularly the country's political actors, to show courage, determination and leadership in putting aside their personal interests and overcoming their differences for the sake of the Libyan people in order to restore the country's sovereignty and the democratic legitimacy of its institutions," Williams said in a brief statement welcoming the bank's decision.

The Geneva meeting of the Libyan Political Dialogue Forum (LPDF), which brings together 75 groups representing all of Libyan society, also discussed the reunification of the national budget and public sector payroll, infrastructure financing, management of the country's growing debt, and management of the VICD-19 pandemic.

The good development of the Libyan economy depends greatly on oil revenues, which have been frozen since September. The thawing of these revenues is largely due to the agreements reached by the LPDF.

The participants in the meeting agreed to end the freeze and to allocate the necessary budget items to the National Petroleum Company. They also insisted that the parties desist from any intimidation of the company for their own benefit.

Williams said he plans to hold a virtual meeting on December 21 with the legal committee and asked the LPDF to accept that the establishment of the committee is the starting point for the preparatory phase of the elections. The Forum, according to Williams, had had difficulty in agreeing on the selection of the supervisory authority for the preparatory phase, and for this reason it is planning to form an advisory committee to bridge the differences between the parties.

He stressed the importance of moving forward with the electoral process without any obstacles preventing it. "Expectations are high internationally, but the most important thing is the Libyan people, so let's not disappoint them, let's be smart, let's look ahead and work together," Williams said.