Counterfeit Libya currency – partly printed by Russia

Unofficial Libyan banknotes, some reportedly printed by Russia and within Libya, are being exchanged for U.S. dollars, contributing to the devaluation of the Libyan dinar, according to sources cited by Reuters.

These notes, deemed counterfeit by the Central Bank of Libya (CBL) in Tripoli, are circulating through the black market and local banks. The funds are used for infrastructure projects in eastern Libya, recovering from last year's floods, and possibly financing Russian mercenary activities, as noted by a diplomatic source.

The Sentry, an investigative group, highlighted Russia's involvement in this influx of new banknotes. However, both the Tripoli-based CBL and its Benghazi branch have not commented on the situation.

Russia's state printer, Goznak, has also remained silent. Since Libya's division in 2014, the country has faced ongoing conflicts despite a 2020 truce and efforts to reunify institutions. The U.S. State Department sanctioned Goznak in June for printing over $1 billion in counterfeit Libyan currency.

The eastern region, under the influence of Commander Khalifa Haftar and supported by Russian mercenaries, insists on the legitimacy of these notes. However, this parallel currency system is viewed as a threat to Libya's banking integrity. Most unofficial notes are in 50-dinar denominations, with two recent issuances being labeled counterfeit by the CBL. These notes are converted into hard currency via black market exchanges or through shell companies manipulating import letters of credit.

To combat the issue, the CBL plans to withdraw all 50-dinar notes by the end of August. The influx of these unofficial notes has further destabilized the Libyan dinar, with significant impacts on the country's economy and the broader geopolitical landscape.