LYD - Libyan Dinar

The history of the Libyan Dinar (LYD)

The Libyan Dinar was introduced in September 1971 to replace the British Pound at a one-to-one exchange rate. This currency is pegged to the special drawing rights at a rate of 2.80 SDR per dinar.

In 1972, the Libyan Arab Foreign Bank was established to address foreign investment issues.

In February 1973, the dinar was pegged to the US dollar at an exchange rate of 0.29679 dinars per dollar (LD 1 = 3.37 US dollars), which was maintained until 1986. On March 18, 1986, the pegged exchange rate was switched to special drawing rights at 1 dinar = 2.80 SDR. On May 1, 1986, the dinar was allowed to trade within a range of 7.5% around 2.80 SDR. This range has been expanded multiple times.

The currency gradually depreciated against the US dollar in the mid-1990s, reaching a value of 1.55 US dollars in 2001. The Libyan Dinar depreciated by 50% to 0.77 USD in 2002.

On January 3, 2021, the dinar continued to be devalued to 1 US dollar = 4.48 LD for all transactions after unifying the exchange rate, narrowing the gap between the official rate and the black market rate.

Coins

Until 1975, old coins with a denomination of milieme (equivalent to dirham) were still in circulation. In 1975, coins were introduced with denominations of 1Dh and 5Dhs., 10Dhs., 20Dhs., 50Dhs. and 100Dhs. has the emblem of the United Arab Republic.

The second series of coins in 1979 with the same denomination featured an engraving of a horseman instead of the emblem. The LD 1⁄4 and LD 1⁄2 coins were issued in 2001 and 2004, respectively. In 2009, the new 50dhs coin., 100dhs., LD 1⁄4 and LD 1⁄2 have been issued. Coins of 1 dh., 5 dhs., 10 dhs. and 20 dhs. rarely used as a unit of exchange. However, they still retain their status as legal tender.

In 2013 and 2014, the LD 1⁄4 and LD 1⁄2 coins and the 50 Dhs. coins. and 100 Dhs. issued by the Central Bank of Libya.

Banknotes

In 1971, banknotes were issued with denominations of LD 1⁄4, LD 1⁄2, LD 1, LD 5, and LD 10. On May 15, 1980, new banknotes were issued with denominations of LD 5 and LD 10. Libyan citizens are allowed to exchange their existing money at the branches of the Central Bank of Libya within a week, after which the old LD 5 and LD 10 notes will no longer be valid.

The LD 20 banknotes were introduced in 2002. On August 27, 2008, the Central Bank of Libya announced a new LD 50 banknote, which was expected to be in circulation on August 31, 2008.

The theme depicted on the banknotes remained unchanged until series 2, except that Gaddafi's portrait became the new front design of the LD 1 note in series 4.

In 2011, Gaddafi's regime was overthrown, and the banknotes were redesigned to replace Gaddafi's image.

On January 14, 2012, the LD50 note was withdrawn. The Central Bank of Libya issued a modified LD10 banknote with revised features.

Next, a modified LD 5 banknote was issued with similar changes to the modified LD 10 banknote.

On February 17, 2013, the Central Bank of Libya issued the LD 1 banknote to commemorate the two-year anniversary of the Libyan civil war.

On March 31, 2013, the LD 20 banknote was issued.

In June 2013, the LD 50 banknote was issued.

Libyan Dinar (LYD) exchange rate

The Libyan Dinar (LYD) has a managed exchange rate regime, meaning its value is managed by the Central Bank of Libya and does not entirely depend on the free market. Specifically:

Fixed exchange rate: Previously, the Dinar had a fixed exchange rate against the USD and other currencies. However, due to the unstable economic situation and political crisis, this exchange rate has not been maintained firmly.

Market exchange rate: Currently, the exchange rate of the Libyan Dinar often fluctuates due to factors such as the political situation, oil prices, and the global economic situation. The exchange rate on the black market can differ significantly from the official rate due to supply and demand for currency.

Central Bank Intervention: The Central Bank of Libya can intervene in the monetary market to stabilize the value of the Dinar through measures such as adjusting interest rates or selling foreign currency.

Inflation: Libya has experienced several periods of inflation, affecting the real value of the Dinar. This inflation may be due to internal factors such as conflict, ineffective economic policies, and a decline in oil production.

The impact of politics and economics: The unstable political situation and economic crises have significantly affected the value of the Dinar, making the exchange rate more volatile.

The exchange rate regime of the Libyan Dinar reflects the intervention of the government and the Central Bank but is also influenced by many internal and global factors. The volatility of the Libyan Dinar often reflects the complex economic and political situation in Libya.