The country’s oil production currently sits at around 760,000 barrels per day, but frequent blockades, strikes and the ongoing contest between political rivals and their allied militias over the control of the all-important oil exports means production has frequently dropped to as low as 500,000 barrels per day in recent months.
On top of that, institutional fragmentation means that the internationally recognized branch of the Central Bank of Libya (CBL) housed in Tripoli and its rival parallel CBL in eastern Libya are adopting different and often conflicting monetary policies to deal with the crisis.
More serious are divisions within the Tripoli faction. A conflict between the Tripoli-based Audit Bureau, which functions as a financial watchdog, and the CBL is hampering attempts to introduce new economic measures. In a rare statement, the Audit Bureau described the CBL as incompetent and complicit in the laundering of foreign currency and smuggling it out of Libya.
Sadiq al-Kabir, the governor of the Tripoli-based CBL, recently pointed out that the Libyan dinar has been under attack. This statement was supported by the Audit Bereau with indication that the plunge of the dinar’s value in the black market is mainly based on speculative rather than real demand. Some financial experts also claim that merchants and importers are deliberately conducting speculatory actions to force the CBL to ease restrictions on letters of credit.