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Libya Cash & Market WG - Libya Joint Market Monitoring Initiative (JMMI) - February 2018 Factsheet

Subject/Objective: 

In an effort to better understand market dynamics in Libya, the Joint Market Monitoring Initiative (JMMI) was initiated by the Libya Cash & Markets Working Group (CMWG) in June 2017. The initiative is guided by the CMWG Markets Taskforce, led by REACH and supported by the CMWG members. It is co-funded by OFDA and UNHCR.
Markets in key urban areas across Libya are assessed on a monthly basis. In each location, field teams record prices and availability of basic food and non-food items (NFI) sold in local shops and markets. This factsheet presents an overview of price ranges and medians for key foods and NFIs in the assessed areas. The cleaned data sets are available on the REACH Resource Centre and distributed to CMWG partners, as well as to the broader humanitarian community.
In future rounds, the factsheet will include a Minimum Expenditure Basket (MEB), which represents the minimum culturally adjusted group of items required to support a Libyan household for one month. The prices associated with the MEB will illustrate variations in prices across assessed locations. The MEB will be included once it has been agreed upon by all partners.

Methodology: 

Data collection for the JMMI occurs on a monthly basis, with associated factsheets and datasets published and distributed after every round. The ninth round of data collection for the JMMI was conducted between 1 and 8 February 2018, during which enumerators from 5 CMWG partners (ACTED, DRC, Mercy Corps, WFP & REACH) gathered price data for 33 basic items from 305 individual shops in 23 locations.
Field staff familiar with the local market conditions identified shops representative of the general price level in their respective location. Assessed shops include supermarkets, bakeries, vegetable sellers and butchers, as well as central markets. At least four prices per assessed item were collected within each location. In line with the purpose of the JMMI, only the price of the cheapest available brand was recorded for each item.
Enumerators were trained on methodology and tools by REACH. Data collection was conducted through the KoBo mobile application. Following data collection, REACH compiled and cleaned all partner data, normalising prices and cross-checking outliers

Key findings: 

Libyan dinar rapidly appreciated on parallel market After the parallel market exchange rates peaked in December 2017, they fell rapidly in mid-January 2018 (see graph on page 2: Exchange rates over time). The USD/LYD exchange rate briefly fell below the 4 LYD mark, but has rebounded since. As of 4 February 2018, the USD could be obtained for 5.350 LYD on the parallel market – a rate almost 40% lower than in early January.
The sudden appreciation of the LYD was most likely linked to the Central Bank of Libya's (CBL) roll out of this year’s family dollar allowance: Each Libyan family is eligible to buy 500 USD at the official exchange rate of roughly 1.350 LYD per USD. By early January, the CBL had reportedly paid out 2.8 billion USD to Libyan citizens claiming the allowance. This move increased the dollar supply in the parallel market, as many recipients exchanged their family allowances for Libyan dinars, and thus strengthened the Libyan dinar.
The recent boost of the Libyan dinar occurred amid promising macroeconomic data, increased oil production and a rising oil price, which has given the CBL more room to grant letters of credit at the official exchange rate to importers. This, in turn, decreased the demand for US dollars in the parallel market.
Food prices decreased by 14.6%
Libya is heavily dependent on food imports. Since many importers are forced to resort to the parallel market to obtain foreign currencies, the recent changes had a significant impact on food prices. Across Libya, food prices fell by 14.6% from January to February. While in the west (–23.5%) and east (–14.1%) food prices have markedly decreased, the exchange rate drop has had a lesser impact on food prices in the south (–4.0%).
Food prices fell in all assessed locations. The largest price decreases were observed in Zliten (–29.2%), Gharyan (–28.1%) and Ajdabiya (–27.0%).
Nearly all monitored food items decreased in price. The price reductions were particularly pronounced for tomatoes (–41.7%), sugar (–35.0%), potatoes (–33.3%) and eggs (–30.4%).
NFI prices fell in the east and west, rose in the south Like food items, the vast majority of non-food items are imported. NFIs have thus fallen in price since January (–10.0%). Broken down by region, a decrease was found in the east (–8.9%) and west (–15.4%), while NFI prices rose in the south (+11.9%).
Since NFIs are not perishable and are easy to store in large quantities, it is likely that traders have drawn from their stocks rather than relied on recent imports. The exchange rate drop has therefore not yet translated into a substantial reduction in NFI prices across the whole country.

Assessment Report: 
Publicly Available
Assessment Questionnaire: 
Not Available
Assessment Data: 
Publicly Available
Operations(s)/Webspace(s): 
Assessment Date(s): 
01 Feb 2018 to 08 Feb 2018
Frequency: 
Monthly
Status: 
Report completed
Population Type(s): 
All affected population
Cluster(s)/Sector(s): 
Leading/Coordinating Organization(s): 
REACH Initiative
Participating Organization(s): 
Agency for Technical Cooperation and Development (ACTED)
Danish Refugee Council
Mercy Corps
World Food Programme
United Nations High Commissioner for Refugees
Location(s): 
Libya
Theme(s): 
Cash Transfer Programming
Market Assessment