NewsNorth AfricaBurdened by cash shortages, Libyans struggle to welcome Ramadan


Posted on Thursday, 17 May 2018 13:38

Burdened by cash shortages, Libyans struggle to welcome Ramadan

By Reuters

Men and children gathered for prayer on the first day of muslim festival Eid al-Adha at a mosque in Misrata, Libya, Friday, Oct. 26, 2012. Photo: Gaia Anderson/AP/SIPAAs the Muslim world prepares for the holy month of Ramadan, Libyan shoppers are crippled by a cash crisis that has hit their annual shopping sprees.

Ahead of the month, where Muslims abstain from eating and drinking from dawn to dusk, many stock up on essential items and food prices soar as demand increases.

But Libya's currency has been losing value against the dollar and a liquidity crisis in banks has left people with tighter budgets.

"There is no liquidity in banks, so the allowance (for a citizen) is around 500 (Libyan) dinars a month which isn't enough income to cover their expenses for a month," said one shopper, Mahfouz Mabrouk.

Heavy reliance on oil revenue

Mabrouk said he found prices this year to be extremely high. "This of course affects the poor citizen, not the citizen who lives in luxury," he added.

Libya relies heavily on oil revenue as a source of income and foreign currency, but output is still stuck well below pre-2011 uprising levels.

Many Libyans have to queue at banks to get money as banknotes have become scarce, with the economy controlled by armed and powerful groups hoarding money.

The U.N.-backed government and the central bank in Tripoli agreed this month on public spending of 42 billion Libyan dinars ($31 billion) for 2018, up from 37 billion last year.

It said 24.5 billion dinars will be spent on salaries, 6.5 billion dinars on subsidies for fuel and other items, 4.7 billion for investment and 6.7 billion for other expenditures.

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