Across Libya, thousands of people queue daily at bank branches, with lines often spilling onto streets and worsening congestion in already jammed capital roads. This is not a temporary disruption but a deepening cash crisis reshaping daily life, where physical money is scarce. Citizens remain trapped in a banking system dominated by outdated, poorly managed government-owned institutions.

The current cash crisis is not new. Long queues outside banks have repeatedly appeared over the past decade as families and businesses struggle to access liquidity. In 2018, a dispute between rival authorities over the Central Bank triggered severe banknote scarcity, forcing citizens to rely on unofficial channels. The problem resurfaced in 2024 amid institutional divides and tighter withdrawal policies. These shortages have done more than inconvenience to savers and wage earners — they have produced a predatory cash economy that thrives on scarcity, with ordinary consumers among its biggest victims. When Libyans cannot convert their checks into physical dinars, they are forced into the hands of cash brokers who monetise access to liquidity. These intermediaries exchange banking instruments for cash only at steep discounts, effectively taxing people for access to their own money.

Small shopkeepers and ordinary traders are not the beneficiaries of this system either but its captives, compelled to accept discounted checks or inflated prices simply to stay afloat. Consumers, too, are forced to navigate these informal markets merely to buy essentials or top up prepaid services, undermining purchasing power and amplifying everyday hardship. The real winners are those who control cash flows — well-connected brokers, bank insiders, and networks shielded by political or armed power — who profit from scarcity rather than serving the economy.

Libya’s banking sector has in recent years been rocked by waves of corruption

© Middle East Monitor