A report published on Thursday by the World Bank focuses on the implications of low oil prices for eight developing countries -- Egypt, Tunisia, Lebanon, Jordan, Iran, Iraq, Yemen and Libya -- and the economies of the GCC (Gulf Cooperation Council).
The Plunging Oil Prices report raises serious concerns about Libya's ability to fund its spending, and says the value of the Libyan dinar has depreciated considerably:
Libya is currently split between rival tribes and political factions with two governments vying for legitimacy since an armed group seized the capital city of Tripoli in August, forcing Prime Minister Abdullah al-Thinni to relocate to the east.
Neither side has prepared a budget for 2015. The price of not reaching an agreement is high, as oil production is currently at one-fifth of its pre-crisis 1.6 million b/d.
That, combined with falling oil prices have forced the government to dip into its large reserves. Reserves reached $100 billion in August, falling by 20 percent since the start of the year and could be depleted in four years under the current situation.
With oil prices plunging and limited oil exports (about 300,000 b/d due to continued fighting and insurgencies in the oil fields), the Libyan currency is under severe pressure.
The value of Libya’s currency has already depreciated in the international market by more than 20 percent.
