Hommam Al Nassim 
Libya’s House of Representatives on Thursday devalued the dinar by imposing a 27% tax on foreign currency purchases, in a move it said would only last until the end of the year.
The new tax effectively weakens the exchange rate from 4.8 Libyan dinars to the dollar to between 5.95 and 6.15 dinars to the dollar.
The text of the decision, issued by Speaker of the House of Representatives Aguila Saleh, stated that the new tax may be reduced depending on state revenues.
Libya has been divided since 2014 between two warring governments, one in the east and the other in the west, with rival factions controlling key economic institutions.
But according to a 2015 political agreement, the House of Representatives and the Tripoli-based High Council of State in western Libya are supposed to agree on key issues affecting the country.
Last week, the governor of the Central Bank of Libya wrote to the speaker of the House of Representatives demanding the devaluation of the dinar through a tax of 27%, saying that this generates revenues of about $ 12 billion that could help pay off some public debt and finance development projects.
The House of Representatives in Benghazi tasked the governor of the Central Bank of Libya in Tripoli “to put this decision into effect by adjusting the sale price of foreign currencies in accordance with this imposed tax and determining the added value on the sale of those currencies against the Libyan currency, provided that foreign currency is available in all banks operating in Libya,” according to the text of the decision.
“The revenue generated from the tax fee shall be used to cover the expenses of development projects, if the need arises, or to be added to the resources allocated by the Central Bank of Libya to repay the public debt,” the decision said.
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