2024-04-23 04:34:33
In an attempt to control the financial confusion caused by the presence of two types of 50 dinar currency, the Central Bank of Libya published an explanatory video yesterday, Sunday, in which it explained to citizens how to distinguish between the correct currency and the counterfeit one.
The Central Bank’s step falls within the scope of media procedures and nothing more, while what is required is to find a monetary mechanism to control counterfeit currency, and countries usually resort to one of two possibilities: printing a new currency, and here the counterfeit currency automatically loses its value, or withdrawing the denomination of currency affected by counterfeiting from circulation.
There was almost certain news that the Central Bank of Libya was intending to withdraw the first and second issues of the (50) dinar denomination from circulation. Libyan banks were directed to accept deposits from Libyans in this denomination, and media websites circulated a circular from the Central Bank calling on banks to accept deposits from the aforementioned denomination.
Economic analyst Ahmed Al-Khamisi said to “Ain Libya” commenting on this topic: “I consider the decision to withdraw this category of currency from circulation, which constitutes 15 to 20 percent of the volume of currency existing, in Tripoli or printed in Russia, as a correct decision and oversight of the money supply.” It is the main means and tool in managing the economy.”
Al-Khamisi added: “There has been an increase in the money supply since 2011, which reached 43.15 billion dinars at the end of 2023 among the public.”
It is clear from Al-Khamisi’s words that what the bank is doing is using a financial tool to the letter, to kill two birds with one stone, cordoning off counterfeit currency on the one hand, and curbing inflation by controlling the amount of liquidity in the market.
In his explanation to “Ain Libya,” Al-Khamisi added, “There is a cash leakage ranging between 19 to 30 percent between 2013 and 2023, and there is a growth in the currency among the public at a rate of 221 percent over 10 years.”
Al-Khamisi considered that “the last treatment is ironing” and withdrawing the currency from circulation will contribute to a decrease in inflation, because the excess liquidity in the economy raises prices with the increase in dealing with electronic cards, and all the dinars in the market go in demand for the dollar.
In what appears to be a clear indication of the seriousness of withdrawing the fifty dinar note from circulation, Libyan banks circulated to their customers that they are ready to receive deposits of the fifty dinar note.
In a post on its official Facebook page, the Republic Bank confirmed its readiness to accept deposits in the denomination of (50) dinars, and said: “Based on the publication of the Central Bank of Libya regarding the withdrawal of the first and second issues of the fifty dinar denomination, the bank is in the process of preparing a regulatory plan to accept the two aforementioned issues and develop… “Work mechanisms ensure that we provide all the capabilities to provide the service to you with ease and convenience, and we will later announce the acceptance of deposits for the first and second issues of the fifty dinar denomination upon completion of the mechanism to accept those deposits.”
For its part, the National Commercial Bank said, in a statement referring to the publication of the Central Bank of Libya regarding the withdrawal of the first and second issues of the fifty (50) dinar note: “We inform you that the bank will organize cash deposits of the fifty dinar denomination in the branches and agencies that will be designated to accept… These deposits have been prepared and the work mechanism has been organized.”
Last updated: April 22, 2024 – 19:32
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2024-04-23 04:34:33