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Libya Cash & Markets WG - Libya Joint Market Monitoring Initiative (JMMI) - November 2017 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.
Methodology: 
Data collection for the JMMI occurs on a monthly basis, with associated factsheets and datasets published and distributed after every round. The sixth round of data collection for the JMMI was conducted between 1 and 10 November 2017, during which enumerators from 5 CMWG partners (ACTED, DRC, Mercy Corps, WFP & REACH) gathered price data for 32 basic items from 268 individual shops. For the November round, 1 new location was added to the coverage, Bani Waleed, increasing the number of assessed cities to 22. 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: 
Prices of Food and NFIs Rose as the Parallel Market Exchange Rate Depreciated The US dollar exchange rate on the Libyan parallel market had been fairly stable from March to September 2017, with rates hovering around 8.0 to 8.2 USD/LYD. In October, however, the Libyan dinar started to further lose value. By early November, the currency depreciated by 5.1% against the US dollar compared to the previous month. Against the Euro, the dinar lost 3.8% while the official rates remained nearly unchanged (USD/LYD: +0.2%). The recent changes in the parallel market rates occurred amid ongoing uncertainty about the country's political and economic future, renewed fighting in different parts of the country and a shortage of Libyan dinars offered by parallel market traders, who are reportedly expecting further depreciation and therefore prefer to hold on to their currency stock.3 As discussed in the CMWG study Market Systems in Libya (available online), a rise in the parallel market exchange rate directly translates into price increases for commodities, as many importers do not have access to letters of credit at the official exchange rate and therefore need to resort to the parallel market to obtain foreign currency. Commodity prices have indeed increased since October: Overall, food prices have risen by 6.4% while NFI prices increased by 9.3% on average across assessed locations (see tables on page 2: Food / NFI Price Index).4 Snapshot of Payment Modalities Accepted in Assessed Shops Confirms Heavy Dependence on Cash Since the November round, the JMMI registers payment modalities accepted in the assessed shops. While all the shops relied on cash payments, only a few accepted other modalities (see chart on page 2: Accepted Payment Modalities in Assessed Shops). Out of the assessed shops, 13.3% allowed customers to buy on credit. Only 7.8% of shops reported that they accepted bank transfers, while a mere 6.8% of shops accepted payments by cheque. Such payments (by cheque) were subject to additional fees of up to 50% of the purchasing price of commodities. Given that only a minority of assessed shops accepted non-cash payments, the data underlines the challenging task of agencies implementing cash-based interventions to find an adequate transfer modality – particularly outside the regional hubs of Tripoli and Benghazi – where cash-in-hand is considered too risky.
Assessment Report: 
Publicly Available
Assessment Data: 
Publicly Available
Contact(s): 
Charlie Rapoport
rapop@unhcr.org
Webspace(s): 
Assessment Date(s): 
01 Nov 2017 to 10 Nov 2017
Frequency: 
Monthly
Status: 
Report completed
Population Type(s): 
All affected population
Cluster(s)/Sector(s): 
Leading/Coordinating Organization(s): 
REACH Initiative
United Nations High Commissioner for Refugees
Participating Organization(s): 
Agency for Technical Cooperation and Development
Danish Refugee Council
Mercy Corps
World Food Programme
Location(s): 
Libya
Theme(s): 
Cash Transfer Programming
Market Assessment