Libya’s fragile economy is facing renewed turmoil as the Central Bank of Libya launches an emergency recall of 50 and 20 dinar banknotes after uncovering a massive wave of counterfeit currency in circulation.

Authorities say the fake banknotes many allegedly printed in Russia under a rival administration during the country’s political divide have triggered a severe cash shortage and eroded public confidence in the financial system.

According to Central Bank officials, over 1.85 billion dinars in counterfeit notes have been identified representing more than 20% of the total currency being withdrawn from circulation.

The scandal has caused long queues outside banks across Libya, with customers facing strict withdrawal limits and growing frustration over liquidity shortages.

In response, the Central Bank announced plans to inject more than 11 billion new dinars into the economy and expand electronic payment systems to stabilize the financial sector and reduce dependence on physical cash.

Economists warn, however, that without greater transparency and unified monetary policy between Libya’s rival administrations, public trust may take years to rebuild.