UK sends unfrozen cash to Libya

31 August 2011 Last updated at 13:52 ET

People rushed to get cash from their accounts after the Libyan banks reopened on Tuesday

The RAF is flying £130m of Libyan banknotes (280m Libyan dinars) to Libya after an assets freeze aimed at Col Muammar Gaddafi was lifted.

The cash, printed in the UK, is the first tranche of £950m that will be handed to Libya’s Central Bank.

A Whitehall official said the money should be available for cash machines and banks in Libya very quickly.

The currency was released following a decision by the United Nations sanctions committee in New York.

‘Step forward’

The official said the cash delivery, worth $1.55bn, should make it possible to pay many public sector workers over the Eid holiday.

Many of those dependent on government salaries have not been paid for many weeks.

The move comes on the eve of a major international conference on the future of Libya to be held in Paris on Thursday, chaired jointly by French President Nicolas Sarkozy and UK Prime Minister David Cameron.

The funds were frozen in February when the uprising in Libya started.

UK Foreign Secretary William Hague has said this latest move represented another “major step forward” in getting necessary assistance to the Libyan people.

Mr Hague said: “These banknotes, which were frozen in the UK under UN sanctions, will help address urgent humanitarian needs, instil confidence in the banking sector, pay salaries of key public sector workers and free up liquidity in the economy.”

Ship held

Germany has also asked for agreement to release about 1bn euros (£900m) in seized assets, while France wants to unfreeze about 5bn euros (£4.4bn) to help pay for humanitarian aid and keep essential services going in Libya.

Last week, the UN agreed to a US request to unblock $1.5bn (£1bn) in frozen Libyan assets.

In March, a ship carrying Libyan currency worth £100m was impounded.

The Home Office said the ship was intercepted by UK authorities after heading back to British waters following an aborted attempt to dock at Libya’s capital, Tripoli.

The money, which was printed in north-east England, was held at Harwich, Essex.

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