By Sami Zaptia.
London, 29 June 2016:
The Tripoli CBL has revealed today that it has received a consignment of newly-printed Libyan money from Britain.
It confirmed that the LD 320 arrived this afternoon at Tripoli’s Mitiga airport.
The CBL said that this consignment brings the amount of newly-printed money received in June to LD 1 billion. It said that the money would be distributed to Libyan banks throughout the country.
The CBL hopes that the latest consignment of newly-printed money arriving in Tripoli would help ease the cash shortage crisis at Libyan banks. However, analysts question the policy of printing new money as a long term solution to the cash crisis.
This week there were still cash shortages and long queues and crowds at banks. Critics say that no matter how much money the CBL pours into the system, citizens will continue to hoard earnings at home as long as they have no confidence in the economic and political system.
The CBL itself admitted on Monday (28th June) that the root causes of the cash crisis are the political crisis in the country, the drastic fall in oil exports and the country’s insecurity.
The political division and polarization of the country has led to a duplication of power centres of authority claiming legitimacy.
The drastic fall in Libya’s oil exports to around 27 percent (400,000 bpd) of the post 2011 peak of 1.5 million bpd have reduced the country’s hard currency revenues. The parallel crash in international crude oil prices has compounded Libya’s declined oil production.
Meanwhile, the insecurity in the country has led to a loss of confidence in the banking system leading to many Libyans hoarding their dinars at home, rather than depositing them in their bank accounts.