• Central bank to release $1 billion in cash to curb black market demand
• Move aims to ease inflation and restore access to foreign currency
• IMF warns underlying fiscal and currency risks remain unresolved

Libya’s central bank is preparing a large-scale dollar sale aimed at stabilizing the currency and easing pressure on households struggling with rising prices.

Yesterday, after meeting with senior commercial bank officials, Central Bank Governor Naji Issa approved a plan to begin selling U.S. dollars directly to citizens starting May 3.

The goal is to inject $1 billion in cash into the economy, bypassing a black market that has become increasingly dominant and providing relief to a population hit by a sharp rise in the cost of living.

A major cash injection to weaken the black market

The rollout is structured in phases. Starting Monday, April 27, an initial $500 million will be distributed to bank branches across the country. The operation relies on a simplified reservation platform designed to draw Libyans back into the formal banking system and reduce reliance on the parallel market, where the dinar has steadily weakened.

The remaining $500 million will be released based on actual demand, according to the central bank.

The intervention reflects growing economic pressure. Inflation reached 12.4% in March 2026, driven largely by a surge in food prices, which rose 16.8%. By improving access to dollars at the official exchange rate, the central bank hopes to ease so-called “imported inflation” and support purchasing power.

IMF flags deeper structural risks

In its consultation report published April 9, the International Monetary Fund raised concerns about Libya’s economic outlook. Growth is expected to reach 6.7% in 2026, supported by oil revenues, but the recovery remains fragile.

The IMF highlighted a widening fiscal deficit, which approached 30% of GDP in 2025, putting pressure on foreign exchange reserves. It also pointed to ongoing currency instability, noting that the dinar was devalued by 14.7% in January—its third devaluation in less than a year.

According to the IMF, the central bank’s $1 billion intervention may provide short-term relief but will not address underlying vulnerabilities without tighter fiscal discipline and a reduction in public spending.

Fiacre E. Kakpo