Core cause of collapse of the dinar is Hafter’s parallel spending outside the approved budgetIt also emphasizes that the core of the dollar exchange rate crisis is fundamentally linked to parallel spending outside the approved budget, which has reached levels several times exceeding the absorptive capacity of the national economy, surpassing the state’s actual ability to finance without harming monetary stability. Background to the crisisThe 300 billion parallel spending by the east has been absorbed as an official public debtIt will be recalled that Aldabaiba recently reported that the volume of parallel spending by the eastern Hafter regime has exceeded 303 billion dinars and has been officially recognized as part of Libya’s public debt. Aldabaiba explained that most of the hard currency issued by the CBL is consumed by parallel spending in the east, driving up demand for the dollar. In other words, the eastern regime is using the LD over-liquidity in circulation (money supply) to be buy up all the dollars on the black-market at any cost – devaluing the Libyan dinar further and further. The CBL viewMeanwhile, while the CBL agrees with Aldabaiba that the eastern regime is engaged in parallel spending outside the budget, it blames the overspending by both government for Libya’s economic crisis.

Source: Libya Today February 24, 2026 10:58 UTC