Libya’s eastern central bank warns unification in peril

Libya’s eastern central bank warns unification in peril

BENGHAZI, Libya - Libya's eastern central bank branch demanded cash from Tripoli on Tuesday, accusing it of disregarding the bank's reunification after years of division during the conflict and indicating it could resume money-printing operations.

The Central Bank of Libya (CBL) split along with other state institutions after rival eastern and western factions went to war in 2014, but started reunification work in 2020 as part of a peace process after a ceasefire.

However, the peacemaking is under increased strain with rival factions again backing different governments and any new moves towards economic division could make a wider escalation more likely.

The split between the central banks, when Tripoli cut off the eastern branch from electronic money-clearing operations, contributed to a major liquidity crisis as exchange rates diverged and people and businesses resorted to cash.

In the east, with commercial banks facing major financial problems, the eastern CBL branch had its own banknotes printed in Russia. Russia, along with the United Arab Emirates and Egypt, backed eastern forces during the civil war.

The eastern CBL said on Tuesday it had stopped printing money "as a goodwill gesture" during the reunification process, but accused the Tripoli CBL headquarters of a mindset of division and of depriving