Mohamed Al-Warfalli, a professor of economics at the Libyan University, stated that parallel market exchange rate fluctuations quickly raise the cost of living. These fluctuations swiftly impact food and essential service prices. They directly affect citizens’ lives. Citizens spend over half their income on food.
Al-Warfalli explained this in a statement to ‘Al-Arabiya Business’. He said current events are a direct result of long-term political and economic accumulations. The depreciation of the dinar and the absence of a unified financial policy opened the door for currency speculation. This accelerated its deterioration in the parallel market.
He pointed out that this situation automatically leads to higher prices. The Libyan economy heavily relies on imports. Any decline in currency value immediately impacts the costs of goods and services.
Al-Warfalli warned against continuing this path without real reforms. These reforms include unifying the budget. They also involve controlling public spending. Transparency in managing oil resources must be enhanced. Failure to implement these changes could push the country into deeper inflation. This would have a greater impact on social stability.