On 4 March, the Libya Economic Review published an article by Mohammed Elgrj, titled ‘Libya’s FX Gap: The Structural Arithmetic Behind Dinar Instability’. Looking at CBL and NOC data, Elgrj argues that the foreign exchange gap, a sustained imbalance between the country’s external earnings and its demand for foreign currency, lies at the heart of the instability of the dinar. He also lays out three scenarios for the trajectory of the dinar in 2026, depending on whether the foreign exchange gap narrows: Controlled Adjustment, Status Quo Persistence, or External Shock.
Read the full article here.