The 50 dinar note…the Central Bank wants to withdraw it without specifying a deadline, and the Hammad government criminalizes refusal to deal with it

The Central Bank of Libya’s announcement of its intention to withdraw the 50-dinar currency due to suspicions of counterfeiting caused a great deal of controversy in the Libyan street, and the Libyan government, headed by Osama Hammad, quickly confirmed in a statement that the decision to permanently withdraw any denomination of currency must be preceded by at least 6 months. This opened the door to questions about the reasons for its opposition to the decision to withdraw this category, and the timing of this step from the Central Bank?

Negotiable

The Libyan government said that the 50-dinar paper currency is normally negotiable between individuals, banking institutions and public entities, stressing that refusal to accept it is criminalized by law and affects the national economy.

6 months
The government stated, in a statement following the issuance of the Central Bank’s statement, that the decision to issue currency denominations and withdraw them from circulation falls within the jurisdiction of the Governor of the Central Bank of Libya and his deputy, with the approval of all members of the bank’s Board of Directors.

She pointed out that the decision to permanently withdraw any category of currency must be preceded by at least 6 months, and that this has not happened so far.

Rejection warning
In the same context, the General Directorate of Criminal Investigation warned the owners of shops, commercial activities and public markets against refusing to deal with the 50 dinar note, stressing that it will take the necessary steps against those who refuse to deal with it.

a crime

The administration stated, in a statement in particular, that this category is accepted by all banks, and that refusing to trade in the local currency is a crime punishable by Libyan law in accordance with the Penal Code, as the Central Bank is still studying the decision to withdraw this category in accordance with controls and a mechanism that it will announce later.

Withdraw currency
The Central Bank had announced, in a letter addressed to the members of the Finance Committee of the House of Representatives, its intention to withdraw the 50 dinar note in its various issues from circulation for fear of high rates of counterfeiting, their continuation, the widening of their circulation, and the inability of employees to distinguish them.

3 issues
The Central Bank revealed the existence of three issues in circulation in the markets of the 50 dinar denomination, a denomination issued by the Central Bank in Tripoli, a second by the Benghazi centers, and a third of unknown origin.

Under investigation
At the same time, the Central Bank’s letter did not reveal any details about its plan to withdraw it, nor a deadline for accepting and replacing it from citizens or merchants in possession of it, saying only that its source is unknown and it is currently subject to investigation procedures at the Attorney General’s Office.

Not circulated
To justify the step to public opinion and make it more convincing, the Central Bank indicated that the 50 dinar denomination is a hoarding currency that is not circulated among the general public in daily transactions, and is used in some legally illegal activities, which causes serious damage to the economy and affects the dinar exchange rate.

The ambiguity of the mechanism

However, those who follow the Central Bank’s statement find that the ambiguity of the terms of acceptance and exchange is still the dominant situation, as it announced the existence of a plan to withdraw the currency according to which this category will be accepted in accordance with the controls and procedures for money laundering and combating terrorism.

Aggravating conditionsH

According to observers, this condition from the Central Bank necessarily means two things, the first of which is that it does not initially recognize the legitimacy of this fifty-fifty note as being counterfeit and that it entered the market by fraud and forgery, while the Central Bank states in the second matter that the conditions for acceptance and replacement may be different from previous cases in which issues were withdrawn and replaced. The currency is old, because the requirements of the Anti-Money Laundering and Anti-Terrorism Law require knowing the source of the money, and the exchange process should not provide an official cover for the counterfeiting process by granting the corresponding value.

Al-Hibri’s signature

On November 16, 2022, the Central Bank revealed that it had detected a counterfeit 50 dinar note, different in specifications from the currency printed in Russia, on behalf of the Central Bank branch in Benghazi, and bearing the signature of the then Deputy Governor, Ali Al-Hibri.