Author Topic: Rival Currencies Set to be Issued in Libya  (Read 3676 times)

0 Members and 1 Guest are viewing this topic.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« on: May 23, 2016, 06:17:40 AM »
Battle of the banknotes as rival currencies are set to be issued in Libya

Patrick Wintour
Diplomatic editor
Friday 20 May 2016 10.37 BST
Last modified on Friday 20 May 2016 23.50 BST

The risk of economic chaos caused by billions of dollars worth of rival banknotes starting to circulate in Libya may fatally undermine the new unity government in Tripoli, senior European diplomats fear.

A political battle between the UN-recognised Tripoli government led by Fayez Sarraj and the Tobruk-based parliament loyal to General Khalifa Haftar in the east has led to parallel splits in the country’s financial institutions, with two central banks threatening to circulate rival Libyan dinar banknotes in the country.

De La Rue, the Basingstoke-based currency printer and a long-term supplier of notes to the Libyan government in Tripoli, sent 70m dinars, worth about $50m, to the country last month and is in the process of delivering a further 1bn dinars before and during Ramadan.

A rival bank governor in the east, Ali Salim al-Hibri, once recognised as the bank governor by the IMF, claims to have printed 4bn dinars worth of banknotes with the help of the Russian state.

The two currencies would have different serial numbers, security details and watermarks, diplomats say. The danger is two central banks flooding the country with conflicting currencies that are not interchangeable in banks. They are also likely to worsen inflation. Food inflation has reached 14% a year.

Diplomats are worried that the currency chaos, allied to expected longer and more frequent power cuts during Ramadan, which starts in a fortnight, will erode wavering support for the UN government.

Badly needed peace talks between the technocratic governors of the two central banks have been staged in Tunis in an effort to create unity in one of the few institutions that can keep the fractured economy from imploding altogether.

The Wall Street Journal has reported that the central bank in the east holds nearly $185m in gold and silver coins in its British-made vault, but is unable to access it because the code is retained by the Tripoli central bank.

The conflict over the banknotes is liable to worsen the country’s longstanding banking liquidity crisis, caused by a reluctance of Libyans to deposit their cash in banks. The shortage of cash in banks has led to long queues and strict limits on the amount than can be withdrawn.

Bank deposits have fallen from 6bn dinars in 2013 to 3bn in 2015.

It is thought that 24bn worth of dinars are in circulation in the country, twice the number of notes circulating per person as in the UK, and an increase of 15bn on 2013. But the insecurity has led to both businesses and individuals refusing to deposit the cash, instead leaving notes in their own vaults or under mattresses.

At a summit in Vienna on Monday, the international community agreed to do more to prop up the Sarraj government in Tripoli, partly to forestall the spread of Islamic State in Libya and partly to prevent an upsurge of people smuggling from the Libyan coastline to the Mediterranean. The summit agreed to supply some arms to the new government and to train a 2,000-strong presidential guard. The guard would protect ministerial buildings and possibly oil installations.

But diplomats fear support for the government will ebb away unless it starts to deliver basic services such as electricity, in the medium term by creating unity within the three chief Libyan institutions: the central bank, the national oil corporation (NOC) and the infrastructure board. There are already frequent power cuts, and diplomats fear the cuts are likely to be more frequent when Ramadan starts in just over a fortnight because more Libyans will be at home for longer.

Support for the government is fragile and according to one estimate 40% of the innumerable Tripoli militia support the new government, 10% are opposed and 50% are waiting to see how the dice fall.

Libya was capable of producing 1.5 million barrels of oil a day before the civil war in 2011. Some UK sources claim production is now falling to an unprecedented low of 100,000 barrels, down from 500,000 last year. The east has also been blocking the export of oil.

El-Sharara oil field has been closed for more than 18 months. The joint venture between NOC and Spain’s Repsol, about 500 miles (800km) to the south-west of Tripoli, has a production capacity of about 370,000 barrels a day.

The arms to be sent are likely to be confined initially to ammunition, bullet-proof vests and night-vision goggles.

In a sign of the threat posed by Isis, it was reported on Wednesday that 32 fighters loyal to the unity government were killed in clashes near the jihadi stronghold of Sirte.

The lifting of the arms embargo will require a UN security council resolution.

The French are eager to see the existing EU Operation Sophia, off Libyan coastal waters, extended to police the arms embargo. Until now Operation Sophia has focused on people smuggling, and the Vienna summit agreed that EU boats outside Libyan waters could help train the Libyan coastguard to stop boats heading for Italy and turn them back.

EU diplomats have agreed that the key to a solution lies in persuading Haftar to merge his forces with the Tripoli government under a joint command, but without Egyptian government pressure on Haftar that seems unlikely.

Haftar has poured scorn on the international community’s call in Vienna to fall in with the Tripoli government.

Source: The Guardian

It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #1 on: May 26, 2016, 05:58:52 AM »
Parallel Central Bank of Libya prints new banknotes in Russia

May 25, 2016 - 14:05

The eastern Central Bank of Libya said today it will put new banknotes of 20 and 50 dinars into public circulation, a step that would complicate the political and financial situations and deepen split in the country.

The parallel bank, based in the city of Bayda, said the new notes of 20 and 50 dinars will be in public circulation from June 01. 

A Bank source disclosed that the new banknotes were printed in Russia and signed by Governor Ali Al-Hibri, the rival for Tripoli-based Governor Al-Siddig Al-Kabir.

"The printed notes are amounted to LYD 4 billion and are the same sizes and denominations as the current banknotes," the source clarified.

The new banknotes will circulate together with the current ones, the bank said.

There is no comment from the official Central Bank of Libya in Tripoli, which is used to print the country's banknotes in England's De La Rue.

Libya is going through a severe liquidity crisis with many banks limiting withdrawals to around LYD 500 dinars per day.

Source: Libya Observer
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #2 on: May 27, 2016, 03:48:29 PM »
PC decides it will now accept the east’s new “Russian” banknotes

By Ajnadin Mustfa and Moutaz Ali.

Tripoli, 26 May 2016:

Some confusion reigned this evening as Libya added a second currency to go with its three different governments. This happened when the Presidency Council reversed its 24-hour old  rejection  of the new bank notes being printed in Russia for the Thinni government in Beida and today fully accepted the move.

The PC explained that its about-turn had come after a meeting with members of the finance committee of the House of Representatives.  It appears that it was agreed that the rival Central Banks in Tripoli and Beida would jointly supervise the issue of the new notes and that they would be distributed fairly throughout the country.

The PC’s original objection to the arrival of LD 4 billion of new currency from printing presses in Russia was that it would destabilise the currency and cause inflation. It protested that there were already LD 24 billion in circulation. Yet that cash is hardly evident to the public. Commercial banks in all parts of country are still limiting withdrawals because they simply do not have enough dinars to go round.

Savers prefer to keep their money at home. Their distrust of the banking system has been boosted by the withdrawal limits imposed in response to the liquidity crisis. If they put their money into banks, they would not be able to get it out again. Those with disposable incomes are buying hard currencies.

When he arrived in Tripoli at the end of March, Government of National Accord prime minister-designate Faiez Serraj made the ending of the currency shortage a priority. It has proved a tough nut to crack. The fresh liquidity provided the east’s “Russian” banknotes may ease the problem. The volte-face appears to have followed the HoR’s assurance that the bills would be made available throughout the country. The fear had been that by acquiring its own currency, the east would have taken an increasingly independent line. Indeed, the east originally commissioned the new notes to alleviate its own chronic shortage.

The United States is unlikely to be pleased by the PC’s change of mind. Yesterday it said it was gravely concerned and shared the PC’s earlier view that the new notes would be forgeries that would destabilise the Libyan Dinar.  It insisted that the international community only recognised the Central Bank in Tripoli.

The PC also said today that from the beginning of next month, $1 billion would be made available for debit cards and another $1 billion injected into the system for use in money-gram transfers, such as that of Western Union.

Source: Libya Herald
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #3 on: November 19, 2016, 03:20:03 PM »
Central Bank of Libya receives Britain-printed banknotes

Libyan Express |Saturday 19 November 2016

The Tripoli-based Central Bank of Libya received Friday a new sum of the Libyan banknotes printed in Britain.

The money cargo arrived in Mitiga Airport in Tripoli.

The Central Bank said it was going to distribute the sum to the banks in all the Libyan cities as per the banking laws.

Libyans have been suffering from shortages in cash at banks that resulted in a huge wave of outrage among them as prices keep soaring and their salaries are imprisoned at the banks, which always have no cash except for a few days in the month.

Source: Libyan Express
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #4 on: February 03, 2017, 04:45:56 AM »
More dinars are flown in to Tripoli to ease currency shortage

By Libya Herald reporters.

Tripoli, 2 February 2017:

A fresh shipment of banknotes has been flown into Tripoli’s Mitiga airport from the UK on a Moldovan cargo plane.

The Libyan Central Bank said today that the new notes had  arrived on Wednesday. It did not say how much was in the latest consignment but promised that the notes would be distributed throughout the country.

Libyan dinars are normally produced by the British security printing company De La Rue. However last May, the rival Central Bank in the east distributed LD 4 billion of new notes that it had commissioned from Russia, which were printed at the state-owned Goznak works in Moscow. After initially condemning the new notes, the Presidency Council later agreed to accept them.

Last April and again in June, the CBL in Tripoli took delivery of several hundred million dinars’ worth of new notes. The exact figure was never revealed. The bank said today that this latest shipment could be followed by further consignments over the next few  months.

It remains unclear if the new notes will finally ease the liquidity shortage in the banking system. The inability to get much, or indeed any money out of bank accounts has caused the substantial hoarding of cash.  Tensions have often boiled over as customers wait to withdraw money. Yesterday morning, two people were reportedly shot and killed by security guards in a stampede outside an overcrowded bank.

Equally uncertain is the inflationary impact of the issuance of new notes. On the blackmarket today the US dollar was trading at LD 6.10.

Source: Libya Herald
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #5 on: March 31, 2017, 05:21:17 AM »
Fresh banknote delivery for CBL

By Libya Herald reporters.

Tripoli, 30 March 2017:

In the week that saw the dinar for the first time pass through seven to the US dollar, the Central Bank of Libya took delivery of a further LD 150 million of new banknotes.

The bills, which as usual were printed in the UK, arrived by freighter at Trioli’s Mitiga airport.

Even though some of the notes will replace existing worn or damaged bills, the extra issuance still represents an increase in the money supply and therefore underpins inflation.

The irony is that throughout the country there remains a crippling lack of liquidity in the retail banking system. Customers still have to queue for hours to get their hands on limited amounts of cash from their accounts.

Source: Libya Herald

Image Caption: Banknotes to the value of LD 150 million arrive at Mitiga (Photo: CBL)
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #6 on: October 21, 2017, 07:00:00 AM »
Eastern Libyan central bank launches its own coins made in Russia

By Ayman al-Warfalli
Reuters
20 October 2017

BENGHAZI, Libya (Reuters) - Authorities in eastern Libya will circulate their own coins for the first time to ease shortages of money, a central bank official said on Friday, in another sign of disunity in the country that has two rival governments in east and west.

The new coins, made in Russia, will join Russian-made paper currency that has already been issued in the eastern half of the country, which is outside the control of the U.N. recognised government based in Tripoli in the west.

Libya, once one of the richest countries in Africa, has faced a sharp decline in living standards since a 2011 NATO-backed uprising toppled dictator Muammar Gaddafi.

The two rival governments and an array of armed groups are vying for control.

While the U.N.-backed government in Tripoli has struggled to control territory and make an impact, the east of the country has a separate cabinet with a prime minister and a local branch of the central bank.

The new coins worth one Libyan dinar - about 75 U.S. cents at the official rate but less than 12 cents on the black market - would be valid from Nov. 2, replacing banknotes that are mostly worn out, said Ramzi al-Agha, head of the liquidity committee at the eastern central bank branch.

The coins are copper coloured, weigh slightly more than a two-euro coin or a new British pound and feature a picture of a plant native to eastern Libya's Green Mountains, with the words "Central Bank of Libya".

The shipment of coins had arrived via the port in the main eastern city of Benghazi which authorities just reopened after a three-year closure due to fighting.

Libya's economy has deteriorated rapidly in recent years as conflict and anarchy have hit oil exports that provide nearly all its income. People queue at banks to get banknotes which are in short supply while living standards plummet and prices surge.

The central bank offices in Tripoli in the west and Bayda in the east both say they are acting neutrally to relieve the crisis. The bank headquarters in Tripoli has in the past criticised the issuance of bank notes in the east.

Nobody was available for comment at the Tripoli bank on Friday, a holiday in Libya.

(Reporting by Ayman al-Warfalli; writing by Ulf Laessing; editing by Peter Graff)

Source: Yahoo (Via Reuters)
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Figleaf

  • Administrator
  • Honorary Member
  • *****
  • Posts: 31 883
Re: Rival Currencies Set to be Issued in Libya
« Reply #7 on: October 21, 2017, 12:23:52 PM »
An old lesson repeated. You can't just "liberate" a country. You have to help it get back on its feet or you are creating the conditions for its next dictator. When will we ever learn?

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #8 on: December 02, 2017, 07:11:41 AM »
Libya's eastern central bank may order more cash from Russia - governor

NOVEMBER 30, 2017 / 8:40 PM

Aidan Lewis

TUNIS (Reuters) - The head of an eastern, parallel branch of Libya’s central bank said he may order more banknotes from Russia, in an effort to ease liquidity problems before a currency devaluation he hopes to work out with the country’s internationally recognised government.

The governor of the eastern bank, Ali al-Hibri is aligned with a rival government based in eastern Libya. He has little leverage, since the recognised central bank in Tripoli has continued to control oil revenues and disburse funds across the country, with international backing.

But four of six board members of the Tripoli-based Central Bank of Libya are aligned with the eastern-based factions that tried to set up parallel financial institutions as conflict in Libya escalated in 2014. Hibri’s central bank is one of those institutions.

The split between the eastern and the Tripoli governments is one consequence of the uprising that overthrew strongman Muammar Gaddafi in 2011. Libya was left with two governments and an assortment of armed factions vying for power.

The political split has contributed to an economic crisis that has left many Libyans struggling. Inflation is running at more than 30 percent and people queue for days to withdraw cash from banks. On the black market, the value of the dinar has slid more than 600 percent since 2014.

Western diplomats say unifying the exchange rates of the two governments could help curb corruption. Some well-connected Libyans get dollars at the official rate on the pretext of importing goods, then sell them at the black market rate.

Hibri said in a rare interview he would not meet the governor of Tripoli’s central bank, Sadiq al-Kabir, but he expected a devaluation and economic reform plan to be pushed through by the recognised Government of National Accord (GNA), headed by Prime Minister Fayez Seraj, and its central bank.

“I am cooperating with (Seraj),” Hibri said. “We are going to reform the exchange rate. We are going to find out how we are going to reform the liquidity problem. We are going to find how to control inflation.”

Under the evolving plans, bloated subsidy spending would be replaced by cash payments, he said.

The Tripoli central bank said earlier this month that an economic and financial reform plan had been agreed at a meeting in Tunis of the two governments and Libya’s Audit Bureau. It gave no details.

Kabir’s relations with the GNA have been tense, and it remains unclear when or how such plans might be implemented. There was no mention of changing the official exchange rate, which remains fixed at 1.36 dinars to the dollar, while the parallel rate has fallen to about 9.5 dinars.

The U.N. and Western powers have been pushing both central banks to work together as they seek to create a unified government to stabilize the oil-rich nation.

RUSSIA

Hibri said devaluation would “probably” ease the liquidity shortage, but that “you need some cover for the period until the exchange rate reform takes place”.

The bank would therefore likely discuss a fresh order for bank notes from Russia at a board meeting next month.

“When we meet in the next board we shall decide – we need to study how much the market needs. We shall have to solve the problem of liquidity,” Hibri said.

The eastern central bank took its first delivery of banknotes from Russia last year, after failing to obtain supplies from British and German companies. The move came as eastern-based factions backing military commander Khalifa Haftar forged closer ties with Russia.

The final batch of the 4 billion dinars was delivered about three months ago, Hibri said.

Last month, the east took a first delivery of coins made in Russia, which Hibri said amounted to 15 million dinars. A further 85 million dinars in coins is due to be shipped by mid-2018.

Hibri restated claims that the east was receiving less than its fair share of funding for salaries and other costs from the Tripoli central bank, saying he had raised 15 billion dinars through treasury bonds since 2015 to support public spending in the east.

Source: Reuters
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 588
  • Mumbai, India.
Rival Currencies Set to be Issued in Libya
« Reply #9 on: February 11, 2018, 02:04:40 PM »
CBL denies withdrawing banknotes from circulation

February 11, 2018 - 14:37
Written by: SafaAlharathy

The Central Bank of Libya (CBL) denied Saturday issuing a decision to withdraw any bank notes, after rumors spread through some media in this regard.

The Libyan News Agency in Tripoli quoted a media source from the CBL as saying that the statement circulated on the social networking pages is false.

Earlier, an alleged statement by the CBL stormed the internet claiming that the 6th issue of the 5 and 10 dinar banknotes would be withdrawn from circulation within 2 months.

Observers indicated that the rumors were likely to be spread by some black market speculators in order to undermine confidence in the Libyan dinar for temporary gains.

Source: Libya Observer
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline eurocoin

  • Technical posts member
  • Honorary Member
  • *****
  • Posts: 4 140
Re: Rival Currencies Set to be Issued in Libya
« Reply #10 on: November 11, 2019, 03:04:39 PM »
From the New York Times:

"In a sign of growing cooperation between Valletta and the Tripoli-based Libyan government, Malta seized in September a shipment of unofficial Libyan currency believed to have been destined for rebel military strongman Khalifa Haftar.

Two containers packed full of the recently introduced currency, printed in Russia, were discovered when the ship carrying the money stopped in Malta, local media reported earlier this month.

The Customs Department did not announce the find at the time and has made no subsequent comment on the operation."