Counterfeit Currency Crisis: Libya's Dinar Under Siege

Libyan banknotes, some printed by Russia and others illegally within Libya, are being exchanged for real dollars, devaluing the local currency. The counterfeit notes are used to fund infrastructure and possibly Russian mercenary activity. Efforts to reunify Libya's banking system face ongoing challenges.

Unofficial Libyan banknotes, reportedly printed by Russia and illicit operations within Libya, are devaluing the dinar as they are exchanged for real dollars, three sources told Reuters. The Central Bank of Libya described these new notes as counterfeit, yet they are being converted on the black market and through local banks.

The influx of counterfeit currency, flagged by international investigative group The Sentry, follows a pattern of Russia supplying banknotes to eastern Libyan authorities since 2016, exacerbating economic tensions. Despite a 2020 ceasefire, efforts for political and economic unification remain elusive, with Libya facing ongoing financial instability.

The U.S. sanctioned Russia's state money printer Goznak for producing counterfeit Libyan currency. The infusion of new banknotes this year, used for infrastructure and possibly mercenary funding, reveals significant threats to Libya's banking system, controlled in part by eastern commander Khalifa Haftar. Counterfeit notes are being withdrawn to mitigate economic fallout.

(With inputs from agencies.)