TRIPOLI (Reuters) – The Central Bank of Libya (CBL) said on Thursday it had contracted British banknote printer De La Rue to print 30 billion dinars ($6.250 billion) in order to “solve the liquidity shortage problem” at the country’s commercial banks.
The central bank said last Sunday that the liquidity shortage problem would be “gradually solved” as of January in accordance with a plan approved by the board of directors.
Despite its oil wealth, Libya has had a liquidity shortage for years, with citizens having to queue outside banks to get cash and salaries since the regime of Muammar Gaddafi was toppled in 2011.
Libya’s economy is heavily reliant on oil revenue, while state payrolls represent the largest percentage of spending, amounting to 48.6 billion dinars for January-October out of oil revenue of 67.8 billion dinars during that period, according to central bank data.
Libya’s exchange rate is 4.8 Libyan dinar to $1.
CBL’s governor Naji Issa met on Wednesday with De La Rue CEO Clive Vacher and Michael Wilson, the company’s regional manager, to discuss implementing the contract, the bank said in a statement.
“The meeting also discussed the schedule of dates for receiving the various shipments of currency,” the bank said.
CBL said it planned to withdraw old banknotes according to a timetable but it did not disclose further details.
Libya has been split since 2014 between warring western and eastern administrations with rival factions seizing control of key economic institutions.
(Reporting by Ahmed Elumami; Editing by Susan Fenton)
