2016-05-26 Thu

This could go down as one of the strangest economic conditions to arise in the world. The UN-recognised Tripoli government led by Fayez Sarraj and the Tobruk-based parliament loyal to General Khalifa Haftar in the east has resulted in the formation of two central banks which are planning to issue their own version of Libyan dinar banknotes in the country. The government in Tripoli has plans to issue 1bn dinars before and during Ramadan while Ali Salim claims to have printed 4bn dinars in association with the Russian state. Reports say that both these banknotes would be completely different from each other in terms of serial numbers, security details and watermarks, diplomats say.

The drawback here is that the notes are not interchangeable in banks and it could increase inflation drastically. Peace talks between the two central banks have been organized in Tunis in an effort to stabilize the country’s economy. Libyans are reluctant about depositing cash in banks which has led to liquidity crisis. Bank deposits have fallen from 6bn dinars in 2013 to 3bn in 2015.