Commercial banks in Libya have begun distributing U.S. dollars in cash directly to citizens, marking the first such move in more than a decade as authorities seek to ease access to foreign currency.
The initiative, launched on Sunday under the direction of the Central Bank of Libya, allows individuals to collect up to US$2,000 annually as part of their personal foreign currency allocation.
Officials say the measure represents a significant shift in Libya’s foreign exchange policy, moving away from previous systems that relied largely on bank transfers and prepaid cards toward direct cash disbursement at banking counters.
The central bank said the policy is part of broader efforts to regulate access to foreign currency, improve liquidity and encourage citizens to use formal banking channels rather than the parallel market.
Under the so-called “personal purposes” programme, Libyans can obtain foreign currency allocations for travel, education, medical needs and other private uses.
In the past, many citizens struggled to access dollars through official channels, often turning to black market dealers where exchange rates are typically higher and more volatile.
By making hard currency available in cash through banks, authorities hope to reduce pressure on the informal market and stabilize the exchange rate, which has been subject to fluctuations in recent years.
The central bank said it would supply foreign currency to commercial lenders while assigning them responsibility for transporting and securing the cash in line with financial safety standards.
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The move comes as Libya continues efforts to reform its financial system after years of political division and economic instability that disrupted banking operations and constrained access to foreign exchange.
Analysts say the success of the initiative will depend on consistent supply and public confidence in the banking system, which has faced challenges including liquidity shortages and limited service delivery.
If effectively implemented, the policy could improve transparency in foreign exchange allocation and help restore trust in formal financial institutions.
However, observers caution that logistical challenges — including the secure distribution of large volumes of cash — and potential disparities in access across regions could complicate the rollout.
The reintroduction of cash-based dollar allocations also reflects broader economic realities in Libya, where cash transactions remain widespread despite efforts to promote digital banking.
For many citizens, the ability to directly obtain foreign currency from banks could ease the burden of international travel and payments, while reducing reliance on informal networks.
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Authorities have not indicated whether the policy could be expanded or adjusted in the future, but say it is part of ongoing reforms aimed at stabilizing the economy and strengthening financial governance.
The development is being closely watched as a test of Libya’s ability to manage its currency system more effectively and address long-standing imbalances in access to foreign exchange.
