It is nearly impossible to walk through the Bab Al-Hurria arch that leads to Al-Musheer Market in the old town of Tripoli, without facing crowds of pushy currency dealers.
The currency trade has dominated over all the other traditional trades in Al-Musheer’s market, like gold, silver, silk, shoes, wedding ceremony supplies and other hand crafts. Today, customers come to exchange money or transfer money to companies or banks oversees.
Illegal trade
It is nearly impossible to walk through the Bab Al-Hurria arch that leads to Al-Musheer Market in the old town of Tripoli, without facing crowds of pushy currency dealers.
The currency trade has dominated over all the other traditional trades in Al-Musheer’s market, like gold, silver, silk, shoes, wedding ceremony supplies and other hand crafts. Today, customers come to exchange money or transfer money to companies or banks oversees.
Illegal trade
New currency traders are not licensed to practice the trade; however, they show the least bit of concern about legal accountability and brazenly display US dollars and euro bills on the front of their shops.
Issam Al-Awal, spokesperson of The Libyan Central Bank says, “All Currency exchange and transfer shops are illegal and are working without licenses.” However, one of those traders, Ali Al-Shareef said that no one had intervened or prohibited him from practicing this trade. Al-Shareef said the hard conditions in the city and the people’s need for foreign currency have fueled the demand for this business.
Not far from the market in which Ali works, near Sa’a “clock” Square in Al-Turk market, scores of traders of different ages flock every day to deal foreign currencies. Some of these traders told Correspondents that they get by on the small daily changes of exchange rates, and that they do not have shops to practice their trade. However, most of them agreed that they control this market by withholding the US dollar in case the price suddenly dropped.
A question to the Mufti
According to one trader, there are many ways to obtain foreign currency and then sell it to customers. “There are traders connected to bank managers who sell them the bank’s share of foreign currency” he said. “Some traders also make fake import deals for which they receive foreign currency from the bank, and then deal this money at the parallel currency exchange market.”
Recent Libyan news reports reveal cases of managers selling their banks’ share of foreign currency at rates that are either shared between bank employees or kept secret and shared between a few selected employees.
A bank employee from Tripoli openly directed a question to the Mufti about his ruling in this case – she would like to get a share of these special rates.
Corruption in the banks
Ezzuldeen Salem, manager of the Magharba branch of Al-Wahda Bank in Tripoli denied the aforementioned claims about bank managers. However, he did not deny malpractice in the process of granting loans.
According to Salem, banks have limited loans for the import of medicines, food supplies and agricultural equipment, and they demand a deposit of 25% of the loan’s value for customs ratification – the actual abuse occurs when determining the deposit rate.
Salem pinned the corruption on two parties: the first being the bank managers who grant loans for a deposit rate of lower than 1 % instead of 25 %, and the second party being customs officials who pass goods without examination. “Both parties know that the import deal is entirely fake, but they confirm it for bribes,” said Salem.
Empty containers
In its 2014 report, the Libyan Court of Audit confirmed Salem’s statement. The report listed in detail the companies that had made fake import deals, and when the court officials along with public prosecution officials opened the files for examination, they found it empty.
Salem confirmed that the role of commerce banks ends with the completion of formalities, and then the central bank grants the value of the imported goods without having the means to examine it.
Issam Al-Awal, spokesperson of The Libyan Central Bank, did not deny the legal offences made by some commercial banks. He said that the bank constantly takes strict measures against those whose involvement in such dealings is verified, and it is constantly imposing legal procedures to limit credit trade.
More than double
Customers are driven to the black market by the lack of foreign currency in the banks, which in turn drives its price in the parallel market to skyrocket.
Mohammad Al-Tarhooni, who has been going to the banks for foreign currency to treat his sick daughter in Europe, has been hearing the same answer for months: no foreign currency has come from the central bank.
Al-Tarhooni points out that the price of the US dollar on the black market is high compared to the official market. The price in the black market reached more than twice the official price. At the beginning of the week the US dollar was dealt on the black market at (2.95 LYD) while the official price ranged between (1.30 and 1.35 LYD).
Payroll in US dollars
“The Libyan Central Bank is responsible for what is happening, the central bank should not stand idly by until disaster happens,” said a senior employee of Al-Wahda bank Mohammad Saleh.
Saleh believes that the state must issue the salaries of its employees in US dollars in order pump currency into the market and prevent corruption. “Libya’s input comes from oil sales, and therefore it is entirely in foreign currency, the state then has to sell this currency to obtain the Libyan Dinar. However, issuing salaries in US dollars in its official value shall spare both the state and the citizen the losses caused by the black market”.
Calls for issuing salaries in US dollars are widely spread on social media outlets, where many campaigns demanding a solution, along with calls on citizens to boycott the black market.
