BENGHAZI, Libya — Libya’s cash-strapped eastern-central bank announced Friday that it had printed its own bank notes, overcoming initial opposition from the U.N.-backed western government.
Distribution of the newly printed dinars, about $3 billion total, will begin June 1, according to a statement by the east’s central bank, which is based in the city of Bayda.
The notes were printed in Russia and look different from the other dinar notes in circulation. They are signed by Ali al-Habri, the governor of the Bayda-based central bank.
The U.S. Embassy on Wednesday said the notes would be “counterfeit” and would “undermine confidence in Libya’s currency.” It noted a U.N. security resolution that calls on member states to recognize only bodies affiliated with the U.N.-backed Tripoli government.
Since 2014, Libya has been divided between two parliaments and governments with each backed by a loose set of militias and tribes. The eastern government and parliament were formed after the last parliament elections, but the Tripoli parliament refused to hand over power to them.
After a U.N.-brokered political deal between factions from each camp at the end of last year, the new unity government has tried to consolidate its grip in the capital, Tripoli but has faced resistance from various political players and armed groups.
The latest crisis emerged after the eastern government received only half the cash it requested from the Tripoli-based Central Bank of Libya, the eastern-central bank statement said.
On Thursday, the eastern-central bank condemned the U.S. Embassy statement and said that it had agreed in a previous meeting, held in Tunisia, with the U.N.-backed premier in Tripoli to print the bank notes, which it described as “needed to contain the crisis.” In its statement, the eastern bank said the move was crucial to “preserve economic stability in the current period at least.”