US Dollar going to be Devalue in Libya???

It would seem unlikely, since the Libyan Dinar is tied to the USD (75%), along with EUR, GBP and Japanese Yen (25%)....I can't see how you'd devalue a currency against the currency which it's tied to?

Sandman6 wrote:

It would seem unlikely, since the Libyan Dinar is tied to the USD (75%), along with EUR, GBP and Japanese Yen (25%)....I can't see how you'd devalue a currency against the currency which it's tied to?

i lol'd. no offense, but economics isn't really your strong point is it sandman6?

let me explain how it works. when a currency is "fixed", what that means is that the government of that country wants to keep it at a certain value (in order to obtain certain economic benefits) instead of letting its value grow or diminish based on the natural market demand for that currency. Usually the value is fixed to the value of the US dollar, so 1 US dollar would be declared by the country to be worth X of local currency.

when a country revalues their "fixed" currency, all they're doing is saying, "from now on, we're going to have the market value be Y dollars for our currency instead of X".

of course as you mentioned, in the case of the Libyan dinar it isn't the value of one currency that it's fixed to but the value of something called the SDR (special drawing rights). An SDR is basically a "basket", containing set amounts of four different currencies (dollar, euro, yen, pound), that a country can borrow from the International Monetary Fund in times of need. The amount of each currency has been modified over time, but the dollar has never even been close to taking up 75% of the basket. Currently its around 41% dollars, 37% euros, 10% yen, and 11% pounds.

anyway, back on topic. while the Libyan dinar was worth much more in the past (~3 dollars to a dinar in the 1970's, and ~1.5 dollars in the late 90s, early 00s), I highly doubt it will be revalued anytime soon. I've heard lots of rumors over the past couple of years, usually around December, that the dinar will be revalued with the start of the new year, but so far rumors is all they've turned out to be.

Yes Sandman u r rite..

3 days before in Ajdabia USd 100 was equal to LYD 128 and today when i called ajdabia the final rate i was given was USD 100 = LYD 120 Only. I was surprized to see the great fall of USD which was looking impossible.

And now the news came that New currency notes with Saif ul Islam photos are going to come in the market and after there arrival USD will be taken much down. Most of the people started to convert USD into Libya Dinar here in sirte Oil.

Sorry the above msg is against sandman's statement and in favor of zestycookie so Sorry sand man you are wrong

zestycookie wrote:

i lol'd. no offense, but economics isn't really your strong point is it sandman6?

I'd never suggested that I was...

But thanks for your more informed explanation anyway