Gaddafi's finance minister fears Libya may run out of cash

Last Updated: Tue, Apr 12, 2011 08:50 hrs

Libya's Finance Minister Abdulhafid Zlitni fears the Muammar al-Gaddafi regime may run out of funds within months if there is no quick resolution to the political and military crisis.

Zlitni said the government would double interest rates in the next week in an attempt to encourage citizens to stop hoarding money at home and deposit their cash in banks.

The decision to raise interest rates is one of a number of emergency measures taken by the regime in recent weeks, including the rationing of fuel, restricting cash withdrawals from banks, increasing public sector pay by 50 percent and doubling pensions, the Guardian reports.

"At the moment, we have no problem with paying salaries and pensions. Although the bills are heavy, we can pay them. This won't take long - maybe a few months," Zlitni said.

When asked if he meant a resolution to the crisis or the exhaustion of Libyan state funds, he said: "Both".

"It is a very unfortunate situation. We did not expect this to happen. Things were going very smoothly," Zlitni said.

Zlitni was reluctant to be drawn on the prospects of a resolution to the two-month old conflict, but said: "We have to sit down and find a solution".

"There were a lot of wise interventions to end the crisis, and that makes me optimistic that it will end soon ... I don't like to forecast political events but, from an economic point of view, we are managing the crisis," he added. (ANI)