By Sami Zaptia.
London, 2 June 2016:
Confusion continues in Libya caused by the claims and counterclaims regarding the newly printed bank notes arriving in the country.
The Tripoli-based Central Bank of Libya (CBL) announced that it had received LD 112.5 million’s worth of newly printed banknotes yesterday. It posted a photo and video of a cargo plane being unloaded. It also stated that the banknotes were printed in Britain.
The Tripoli CBL further confirmed that it expects another LD 250 million of new banknotes to arrive by the middle of June.
Critics had published a complete list of aircraft landing at Mitiga airport showing no cargo plane had arrived on the day. However, Mitiga airport had posted a photo on its Facebook page of the Airbus arriving with the money ”from London”.
The suggestion had been that the money had either arrived earlier and was being hoarded by CBL Tripoli or that no money had arrived at all. Another suggestion is that it was newly printed money arriving from eastern Libya.
Ultimately, time will very shortly tell. The so called ”Russian” money is slightly different so once distributed it would be clear if the money had originated from eastern Libya. Either way, yesterday’s demonstrations seem to have forced Tripoli CBL’s hand to react by issuing new money, after it dilly dallied over whether to accept or delegitimize Beida’s Russian money.
The CBL has made no further official statements and denied that its Governor was to hold a press conference on the subject.
Libya is going through an acute cash shortage with banks enforcing different withdrawal limits as low as LD 250 per month caused by a crash in oil production and a decline in international crude oil prices. The crash in Libya’s oil production is caused by a politically-motivated oil blockade by the Petroleum Facilities Guards (PFG) in the eastern production area.
Although the money arrived by aircraft at Tripoli’s Mitiga airport, the Tripoli CBL said the new money notes would be distributed throughout Libya.
The new banknotes arrived two days after the arrival of the so-called ‘’Russian’’ printed bank notes in eastern Libya. Yesterday the new Russian bank notes were distributed in the east. Also yesterday, people started demonstrating outside banks in Tripoli when they were unable to withdraw any cash.
Eastern-based CBL Governor Ali Hibri warned at a press conference that printing new money was not a long term solution to Libya’s economic crises. He said other policies were needed in order to solve the country’s economic woes. He asked the Libyan public as well as companies not to withdraw all their cash from banks and to continue to deposit their takings into banks.
Meanwhile, Presidential Council head Faiez Serraj has called for an urgent meeting between the Tripoli and Beida CBLs, and the House of Representatives Finance Committee to resolve the issue.
Serraj’s call for a meeting with the HoR Finance Committee is evidence of his acceptance of his incomplete legitimacy and his continued recognition of the continuing legitimacy of the HoR.
Meanwhile, yesterday the black market dollar rate closed up at LD 3.92 per dollar, continuing the recent rise reflecting insecurity, uncertainty and the approach of the fasting month of Ramadan. The official dollar exchange rate is LD 1 to US$ 1.37.
Yesterday’s demonstrations were indicative of the continuing poor situation in Libya which has worsened during Serraj’s two months in the Bu Sitta Naval Base. [/restrict]