Libya Dinar Devaluation Shocks Markets: Is the Central Bank Signaling Deeper Economic Trouble?
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Fatima Saif
- . January 19, 2026
- . Update: January 19, 2026 6:51 pm
The economy of Libya has gone into another phase of crisis following a drastic currency adjustment given by the central bank. The 14.7 percent devaluation of the Libya dinar has also brought some new worries to the businesses, investors and the common people. This action is the second devaluation of the Libya dinar within a period of less than one year and this points to the financial strain. Analysts believe that the move is a symptom of larger structural issues, such as political parting, lack of fiscal discipline and overdependence on oil revenues. The devaluation of the Libya dinar will lead to higher costs in imports as the risks of inflation are heightened and household budgets will be further stretched. It is a question many are now asking whether this measure will steady the economy or increase the problems faced.
Central Bank Cites Political and Economic Pressures
The new exchange rate was determined by the central bank as 6.3759 dinars per the U.S dollar, after an earlier Libya dinar devaluation in April 2025. The government attributed it to chronic political fragmentation, a plummeting oil revenue owing to the declining global prices, and lack of an integrated national budget. The economy has been shaken by a series of instability in the production of oil which forms the backbone of the economy, since 2011. With no reforms, experts caution that the ongoing Libya dinar devaluation actions could just offer temporary relief and increase uncertainty in the long term.
