Central Bank of Libya, west and east, exchange accusations on liquidity

banking - June 30, 2022

The western and eastern Central Bank of Libya (CBL) branches have exchanged accusations on the causes of the liquidity crisis in the east.

The eastern CBL accused the Tripoli branch yesterday of failing to deliver enough cash to the eastern region and warned that it may be forced to take other measures to ensure liquidity. This has been interpreted as a veiled threat to resort to printing money in Russia again.

However, CBL Tripoli responded by releasing figures purporting to have delivered one billion dinars to the eastern CBL for distribution to regional banks. Moreover, CBL Tripoli claimed that only 500 million dinars were distributed by the eastern CBL. It claimed that the eastern CBL retained the balance despite the need for liquidity in the region.

As a result, Tripoli CBL said it has the right to take exceptional measures to provide liquidity directly to eastern banks in light of what it called the ineffectiveness of the eastern CBL and its deliberate withholding of funds and keeping them in its vaults and creating a liquidity crisis.

The Tripoli CBL said that there is no truth in the false allegations of the existence of a liquidity problem in any region of Libya.

Most analysts see the matter as a political issue with the eastern CBL pushing for the bank clearing system with Tripoli to be reopened and wanting a meeting of the CBL Board of Directors.

libyaherald



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