File - Libya’s economy has taken a hit since rebels blockaded export terminals last summer, forcing a sharp drop in oil revenues.
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Libya's currency is under heavy pressure as a breakdown in security and a collapse of oil revenues due to port blockades have badly disrupted public finances and an economy already burdened by exploding state salary and subsidy bills.Over the past two months, the dinar has fallen more than 7 percent against the dollar on the black market, its first weakness since rebels demanding autonomy for eastern Libya seized oil export facilities 10 months ago.The loss of oil revenues has forced the central bank to dip into its reserves to fund a $50 billion budget that goes mainly to price subsidies and civil servants' pay.The central bank has blamed currency speculators for the dinar's drop, insisting Libya can hold out for three-and-a-half years without oil income thanks to foreign reserves exceeding $100 billion, accumulated during years of high oil prices.The central bank has tried to avoid burning through the foreign reserves, which have nevertheless fallen to $110 billion from $132 billion last summer.
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