Whether you are at the market, at home, sitting in a café, or scrolling through social media, the same conversation keeps coming up:
How much is the dollar today in Al-Mushir (the black market)?
Will food prices go down?
How much does a kilo of meat cost today?
These questions are no longer limited to traders or economists. They have become part of everyday conversation for Libyans. The Libyan dinar has deeply entered daily life, and any change in its value is immediately reflected in what people buy and consume.
What happened in 2025 intensified these discussions. Monetary decisions, exchange rate adjustments, and a widening gap between the official rate and the parallel (black) market brought the dinar back to the center of public debate—not just as a currency, but as an issue directly affecting living standards.
However, these discussions did not start today, nor will they end anytime soon. They are the result of a long journey the Libyan dinar has gone through—from years of strength and confidence to prolonged periods of instability and volatility. Understanding this path is the first step toward understanding today’s reality and why the exchange rate has become a concern for everyone.
The dinar is no longer just a means of payment; it has become a daily anxiety indicator. Every movement in its value directly affects people’s lives and their sense of security or fear. Each time it weakens, the same questions return:
How did the currency of an oil-rich country reach this point? And why do countries with fewer natural resources, such as Tunisia, enjoy more stable currencies?
The Dollar Between the Official Rate and the Parallel Market
The Central Bank of Libya publishes the official exchange rate regularly. By the end of 2025, the official rate was around 5.4 LYD per US dollar, according to central bank bulletins.
In the parallel (black) market, however, a very different picture emerges. According to an update published on 26 November 2025, the dollar reached approximately 7.92 LYD in the black market, based on exchange rate updates reported by Libya Observer—a significant gap from the official rate. Other reports even indicated that the dollar exceeded 8.5 LYD by the end of December.
The chart below illustrates the difference between the official dollar rate and the black-market rate during 2025.
USD/LYD
Why Did the Gap Widen?
The widening gap between the official and black-market exchange rates can be explained by several clear and simple factors.
1. Difficulty Accessing Dollars Through Official Channels
In many cases, citizens and traders cannot easily obtain dollars from banks due to procedures, delays, or imposed limits. When dollars are urgently needed—for imports, medical treatment, or travel—people turn to the black market despite higher prices. It is similar to a product with a low official price but no availability, forcing people to buy it elsewhere at a higher cost.
2. Increased Demand for the Dollar
Libya’s economy relies heavily on imports, meaning most goods are purchased in dollars. People also need dollars for travel, education, or savings. As demand increases, the price naturally rises—just like any commodity when demand exceeds supply.
3. Fear and Public Expectations
When news spreads about crises or sudden economic decisions, people worry about the value of their money. The dollar then becomes a “safe haven,” purchased not because it is needed immediately, but out of fear of what may happen next. This behavior alone can drive prices higher even without an actual shortage.
4. Lack of Policy Clarity
Economic decisions that are poorly explained or frequently changed create uncertainty. Without a clear vision, confidence in the dinar weakens, and people prefer converting their savings into dollars. The more uncertainty grows, the more pressure builds in the parallel market.
Ultimately, the black market is not just a place to exchange currency—it is a confidence indicator. The greater the uncertainty and lack of trust, the higher the black-market rate and the wider the gap with the official price.
6 April 2025: A Turning Point in Exchange Rate Policy
On 6 April 2025, the Central Bank of Libya announced a 13.3% devaluation of the dinar, setting the official exchange rate at approximately 5.56 LYD per dollar. This was the first official adjustment since January 2021, when the exchange rate was unified at 4.48 LYD per dollar.
At that time, the move aimed to narrow the gap between the former official rate—around 1.40 LYD per dollar(excluding the foreign exchange tax)—and the parallel market rate of roughly 5 LYD. The policy was relatively successful, as the gap narrowed during much of 2021.
However, by the end of 2021, the gap widened again due to renewed pressure on foreign currency, expanded public spending, increased demand for dollars, and renewed political uncertainty, pushing people back toward the parallel market.
In April 2025, the central bank attempted to repeat the same approach. The decision came as the gap was once again widening, with black-market rates far above the official level. The move received wide coverage from international and regional media, including Reuters and Al Jazeera, which linked the devaluation to accumulated fiscal pressures, public spending challenges, and institutional division.
Although the stated goal was to reduce distortions in the foreign exchange market, the psychological impact of the decision increased demand in the black market, leading prices to continue rising rather than stabilizing.
The April 2025 devaluation was not the last. In January 2026, the central bank implemented another devaluation, signaling ongoing economic and monetary pressure and the failure to address the root causes of exchange rate instability.
Will the Dollar Continue to Rise in Libya?
The short answer is: yes.
As long as national wealth is not managed properly, pressure on the dinar will persist. Oil revenues exist and continue to flow, but decision-making remains divided, spending is duplicated and uncontrolled, and policies change without a clear long-term vision. The dinar has paid the price—and citizens continue to pay it.
By contrast, countries with fewer natural resources, such as Tunisia, enjoy more stable currencies not because they are richer, but because they have more consistent institutions, clearer economic policies, and unified fiscal and monetary decision-making. The difference is not the size of wealth, but how it is managed.
A strong currency reflects not only resources, but discipline, clarity, and trust in the state above all else.
Without changing this reality, the black market will remain faster and clearer than official channels. Escaping this path does not start with changing the exchange rate itself, but with unifying fiscal and monetary decisions, controlling public spending, and presenting a transparent, credible policy framework that people and markets can trust. Otherwise, the Libyan dinar risks following the path of currencies that collapsed despite resource wealth—such as the Venezuelan bolívar.
