RIPOLI (Reuters) – – Libya’s internationally recognized government on Wednesday imposed a fee of 183 percent on any hard currency transactions, effectively devaluing the Libyan dinar to bridge the gap to the dominating black market.
If implemented in a country in chaos where the central bank struggles to impose its will, the move devalues the official rate of the dinar to the dollar for such deals to around 3.9 from 1.4, Libya’s Eqtisidiya business TV channel said.
Its impact was unclear. The black market rate stands at around 6, and the fee covers only part of the market. Family allowances will be excluded as well as possibly imports of fuel and other subsidized goods.
The gap has done much to distort Libya’s oil-dependent economy, contributing to a liquidity crisis and causing corruption as armed groups with access to dollars at the official rate make huge profits through import scams.
The fee is supposed to be paid on commercial transactions but it remains unclear how it will be collected.
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