Libyans swap jewelry for medical treatment as crisis bites

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Libyans swap jewelry for medical treatment as crisis bites

TRIPOLI: In a square behind Libya’s central bank, black market dealers, some of them armed, carry small plastic bags filled with dollars and larger ones with dinars in and out of one of many informal exchanges.

Traders buy food and other goods from abroad at the official rate and sell them at the unofficial one, pocketing vast profits; others make equally large sums by smuggling out heavily subsidized fuel.

In the back streets of the old city meanwhile, ordinary people have resorted to selling jewelry or dollars hidden at home as six years of post-dictatorship chaos take their toll.

“I haven’t been paid for four months,” said Fatima, 40, from the southern city of Sabha as she sold three small gold charms to pay for diabetes treatment for her sister, Hasina, who added: “We’re helpless, there’s nothing else we can do.”

In other signs of rising poverty, elderly women beg motorists for cash on Tripoli’s streets and families queue for charity food handouts. The U.N. estimated that about 1.3 million people in Libya need humanitarian assistance this year.

Their situation took another turn for the worse in the past two weeks after the black market rate of the dinar, which has long languished at record lows, slid again, fuelling inflation that is already around 25-30 percent.

The central bank blamed the audit bureau and the U.N.-backed government for restricting letters of credit that fund basic supplies to a divided country where a security vacuum and smuggling networks have destabilized the wider region.

Officials had come across suspect requests – one to import tuna worth $120,000, more than the country consumes in a year, according to a Libyan entrepreneur who declined to be named, fearing retribution from Libya’s powerful armed groups.

Just $2.5 billion of an expected $7.4 billion of credit has been allocated, the trader said, helping knock the dinar from around 8.5 to 9.25 against the dollar on the black market. Its value has fallen by more than 600 percent since early 2014.

The economy ministry was not immediately available for comment on a complex credit system that passes through commercial banks and where the audit bureau had documented earlier abuses and lack of oversight.

“We’re talking about an extremely bad economic and financial situation,” Central Bank Governor Sadiq al-Kabir said in a rare news conference on Tuesday. “Everyone, whether legislative or executive, holds responsibility equally.”