Dinars from heaven as Britain flies banknotes to Libya

BENGHAZI, Libya Thu Sep 1, 2011 11:44am BST

1 of 5. A forklift prepares to transport crates of bank notes at an airport in Benghazi August 31, 2011. Britain's Royal Air Force on Wednesday flew a special mission to Libya -- freshly printed bank notes worth more than $1.5 billion which will be used to help its new rulers pay public workers and banks to replenish cash machines.

Credit: Reuters/Esam Al-Fetori

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BENGHAZI, Libya (Reuters) - Britain's air force has flown 40 tonnes of freshly printed bank notes -- many bearing the image of fallen strongman Muammar Gaddafi -- into Libya to help its new rulers pay public workers and its banks to replenish cash machines.

The 280 million Libyan dinars, officially worth about $234 million (144 million pounds), is part of a consignment worth about $1.5 billion ordered by Gaddafi from British printing firm De La Rue Plc but blocked by Britain in March after he cracked down on protests.

Now that National Transitional Council forces have overthrown Gaddafi, Britain is releasing the money to ease a cash crunch. The remainder will be delivered "shortly," Foreign Secretary William Hague said in a statement.

"We have been very short of cash," Central Bank of Libya Governor Gasem Azzoz told Reuters as he waited for the secretive flight on the tarmac at Benghazi's airport after nightfall on Wednesday.

He said workers had been going without their regular salaries and that many Libyans had been hoarding currency after losing faith in the banking system.

While at the 1.19 dinar-to-dollar rate quoted on the interbank market on Thursday the 280 million dinars is worth about $234 million, it would likely only fetch about $200 million at the current street rate in Benghazi.

BREAD, WATER, NOT GADDAFI

The C-17 Royal Air Force plane landed in darkness under tight security and taxied into position before its rear ramp came down and fork-lift vehicles began unloading huge pallets, stacked about two metres (six feet) high with cardboard boxes wrapped in plastic.

Armed guards stood by as the boxes of cash were loaded onto five container trucks. Reporters were asked not to publish the news for several hours, until after the money was safely deposited in bank vaults.

"This is as much as we could get on this flight," said British special representative to Libya John Jenkins who also watched the shipment being unloaded. "This is critical to restoring liquidity."

The money would help pay many tens of thousands of government workers, who make up about 80 percent of the Libyan workforce and who have been patiently accepting crimped salaries as a sacrifice for ousting Gaddafi, Azzoz said.

"People have been cooperating. They say 'we can survive with only bread and water, but not with Gaddafi'."

Still, they're going to have to put up with Gaddafi's face staring out at them from the one dinar note for a while yet.

"They won't complain, they know it's not a new design," Azzoz said. All the same, the central bank had launched a competition for new designs, he said.

(Additional reporting by Keith Weir in London; Editing by Rosalind Russell)

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