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🛒 تسوق الآنEconomic Expert Demands Libya's Central Bank Resolve One-Dinar Currency Crisis
Economic Expert Demands Libya's Central Bank Resolve One-Dinar Currency Crisis
Libya's divided one-dinar currency — paper notes in the west, coins in the east — has sparked a new controversy that an economics professor says the Central Bank must settle immediately.
A leading Libyan economics professor has called on the Central Bank of Libya (CBL) to take decisive action on the long-running crisis surrounding the one-dinar currency. Dr. Ali Al-Sharif, Professor of Economics at the University of Benghazi, warned that having legal tender that some citizens refuse to accept is unsustainable for the national economy.
Al-Sharif outlined two clear paths in a Facebook post that quickly gained traction: the CBL must either mandate universal acceptance of the one-dinar note as legal tender across all of Libya, or withdraw it entirely and replace it with a unified issuance.
A Tale of Two Currencies
The controversy stems from Libya's institutional divide. In western Libya, the one-dinar circulates as a paper banknote issued by the CBL's Tripoli branch. In the east, under the parallel government in Benghazi, it exists as a metal coin. Although both hold the same nominal value, practical acceptance differs sharply by region.
"It is unacceptable for a country to have legally circulating currency that people or entities refuse to handle," Al-Sharif wrote. "This creates confusion in daily transactions and undermines confidence in the national currency."
This fragmentation reflects the broader monetary crisis since the Central Bank split in 2014 into two competing branches — Tripoli and Benghazi. Despite unification agreements, practical differences in currency design persist at the consumer level.
Two Non-Negotiable Options
Al-Sharif presented the Central Bank with two choices:
- Option One: Issue a binding directive compelling all government entities, businesses, and individuals across Libya to accept the one-dinar in both forms as valid legal tender, backed by enforcement mechanisms.
- Option Two: Withdraw all existing one-dinar notes and coins from circulation and replace them with a newly designed, unified issuance with consistent specifications across the country.
Either path would end the ambiguity that leaves Libyans uncertain which version of their currency will be accepted in any given transaction.
Devaluation Adds Pressure
The one-dinar crisis unfolds against serious currency devaluation. In January 2026, the CBL cut the dinar's value by 14.7% against the Special Drawing Rights basket, bringing the rate to about 6.3-6.4 dinars per US dollar — the second major devaluation in under a year.
Analysts warn that repeated devaluations, combined with the fragmented currency system, are eroding public trust. The black-market rate has at times exceeded 8 dinars to the dollar, widening the gap between official and parallel rates. Economist Idris Al-Sharif previously warned that unilateral devaluation could cause the dinar to lose up to 80% of its purchasing power without accompanying structural reforms.
Structural Challenges
The one-dinar standoff is symptomatic of deeper problems. Chronic liquidity shortages, a sprawling foreign currency black market, and the absence of unified fiscal policy have created what experts call a perfect storm for the national currency. Libya depends on oil revenues for over 90% of state income, and the lack of economic diversification has prevented comprehensive monetary reform.
Despite the CBL injecting $2 billion into the market in March 2026, the underlying currency challenges remain. Experts agree that without a political settlement reunifying Libya's monetary institutions, technical fixes alone cannot restore full confidence in the dinar.
Al-Sharif's call adds to mounting pressure on the Central Bank. No official response has been issued yet, but the growing public discourse suggests the one-dinar issue can no longer be ignored. The coming weeks may reveal whether the CBL will choose one of the paths laid out — or let the crisis deepen.
— Libya Press / Economics Desk
