By Adam Nathan.
The new Government of National Accord (GNA) of Libya is working with the Central Bank of Libya (CBL) to encourage people to put their money back into the banks to end Libya’s liquidity crisis.
An on-going liquidity crisis in Libya sees regular long queues outside banks to withdraw Libyan dinars and foreign currency and has led to the printing of emergency bank notes in Britain and Russia to satisfy domestic demand.
Both the Libyan government and CBL agree that one cause of the problem is the 26 billion Libyan Dinar being kept by citizens “under the mattress” due to concerns about political and economic stability.
“There are about 26 billion Libyan dinars outside the banking sector and the central bank is currently working to encourage commercial banks deposit operations, where we have seen increased withdrawals from deposit accounts a result of current unstable political conditions,” said a spokesman for the CBL.
The spokesman added that political stability was key to stemming the crisis: “Political consensus is needed to stimulate the economy of the country and if political division continues this will cause a financial crisis and unfortunately that is what has been happening up to now.”
GNA Deputy Prime Minister Ahmad Maiteeg, who is coordinating government and banking sector action on the problem, told Libya Business News: “People are hiding money under their beds. The figure has doubled since 2013 to 26 billion Libyan dinars due to division and lack of stability.”