Libya's central bank outlines three-track plan to end liquidity crisis as cyberattack tests its digital ambitions

The Central Bank of Libya (CBL) has described the three simultaneous tracks it is using to resolve the country's chronic liquidity crisis, saying visible improvements have appeared in bank branches since the post-Eid al-Adha resumption of business this week — the first such improvement in years, a senior official told Al Jazeera on Thursday 11 June.

The official, who spoke on condition of anonymity, said the current easing was not the product of a single measure but of three parallel lines of work the CBL has been pursuing simultaneously.

The three tracks

The first track is logistical: the bank reorganised the distribution of physical dinars between branches of commercial banks to ensure fairer allocation across different regions, after years in which some areas routinely ran out of cash while others were better served.

The second is a currency replacement programme. The CBL contracted to print 60 billion dinars — around $9.4 billion at the current official rate — in new banknotes to replace degraded or informally circulating notes withdrawn from the system. The contract with British printer De La Rue was signed in 2025; a first tranche of around 25 billion dinars had already been distributed to commercial banks by late 2025, with further shipments continuing into 2026.

The third track is digital. The CBL has pushed hard on financial inclusion: expanding point-of-sale terminals, mandating electronic payments in public-sector institutions, cutting merchant fees, and rolling out instant-payment platforms LYPay and OnePay. The official said the value of electronic transactions rose from around 74 billion dinars in the whole of September 2024 to 397.1 billion dinars across the full year of 2025, and had already reached 340.5 billion dinars in the first five months of 2026 alone. Those figures track Al Jazeera's sourcing and are broadly consistent with CBL data published earlier this year, which put total electronic transaction values at 389 billion dinars in 2025 against 136 billion in 2024.

The CBL has also extended dollar sales through official channels — banks and licensed exchange companies — as a tool to absorb demand that previously flowed to the parallel market, CBL Governor Naji Mohammed Issa said in April, on the sidelines of IMF Article IV consultations held in Tunis. Issa said the plan opened with an injection of $1.5 billion in foreign currency and would continue with regular monthly injections through to the end of the year. The bank's stated aim is to narrow the gap between the official exchange rate and the black-market rate to no more than 5 percent.

The backdrop: dinar under pressure

The context for the programme is severe. The CBL devalued the dinar by 13.3 percent in April 2025 and by a further 14.7 percent in January 2026, moving the official rate to around 6.37–6.40 dinars per dollar. The parallel market, however, has at times priced the dollar at 9 dinars. Neither devaluation closed the black-market gap for long, according to analysis published by the Atlantic Council.

Political division between Libya's eastern and western authorities has compounded the problem. Parallel spending by two separate governments has exceeded 70 billion dinars, Prime Minister Abd Alhamid Aldabaiba's office warned in February, and the IMF — after a mission to Tunis in late March and early April — described Libya's fiscal policy as unsustainable, warning of significant balance-of-payments risks. The Fund noted that despite system-wide excess liquidity, credit to the private sector is effectively restricted, limiting banks' ability to support business and investment.

A cyberattack complicates the picture

The same week the CBL's liquidity progress was being reported, the bank disclosed a separate threat to its digital infrastructure. On 9 June the CBL announced it had detected a cyber incident affecting some of its systems and technical services. Emergency response procedures and business continuity plans were immediately activated, and the affected systems were isolated, the bank said in a statement.

The CBL said the impact was limited to a small number of systems and that card services, the LYPay platform and other day-to-day operational services continued to function normally. Specialist technical teams, working with international cybersecurity firms, are investigating the scope and potential data impact of the incident; the bank said findings would be disclosed once technical verification is complete.

Analysts cited by Al Jazeera noted the attack amounts to a test of the very confidence the bank is trying to build: public trust in Libya's banking sector now depends not only on the availability of physical cash but on the security of the digital systems being offered as its replacement.