Libya takes bold steps to address liquidity crisis with new banknote printing and digital payment initiatives

Libya is enacting extraordinary measures to tackle its persistent liquidity crisis. On December 5, 2024, the Central Bank of Libya announced a partnership with the British company ‘De La Rue’ to print 30 billion dinars (approximately $6.25 billion) in new currency. This decision follows years of acute financial difficulties, compounded by political instability since the fall of Muammar Gaddafi in October 2011.

The liquidity shortage, despite Libya’s substantial oil revenues, has deeply affected daily life. Citizens frequently endure long queues at banks to withdraw cash or access their salaries, highlighting the fragility of the financial system. The Central Bank aims to begin resolving this crisis in January 2025, with the issuance of the new banknotes. On December 4, Bank Governor Najy Issa held discussions with De La Rue executives to finalize the implementation of the printing contract.

In addition to the currency printing initiative, Libya is accelerating efforts to modernize its financial ecosystem by promoting digital payment systems. The shortage of cash has driven many Libyans to adopt bank cards and electronic payment methods, but the country’s payment infrastructure remains underdeveloped. To address this gap, the government has announced measures to expand access to bank cards and encourage the use of digital transactions, aiming to reduce reliance on physical cash.

These combined efforts reflect Libya’s dual approach: addressing the immediate urgency of the liquidity crisis while laying the foundation for a modernized and resilient financial system. By prioritizing both short-term relief and long-term transformation, authorities hope to stabilize the economy and restore public confidence in the financial sector.