U.K. Flies Banknotes to Libya to Ease Cash Shortage - Bloomberg

(Corrects amount delivered in first paragraph of story first published on Aug. 31. See EXTRA for more on the Libyan conflict.)

Britain's Royal Air Force flew 280 million dinars ($233 million) to Benghazi today to help end a shortage of cash after rebels ousted Muammar Qaddafi from Tripoli, the Foreign and Commonwealth Office said in an e-mailed statement.

The amount is part of 1.86 billion dinars printed in the U.K. that was frozen under a United Nations ruling. Delivery of the remaining funds will be made shortly, the FCO statement said.

The flight followed the decision by the United Nations Security Council in New York yesterday to approve the U.K.'s request to release the cash so it could be returned to the Central Bank of Libya. The step needed the support of all 15 council members as an exemption to UN sanctions on Libya and came after Russia and China lifted their objections.

"This represents another major step forward in getting necessary assistance to the Libyan people, building on the remarkable progress in recent days," the U.K. Foreign Office said in a statement after the UN decision. "These banknotes, which were frozen in the U.K. under UN sanctions, will help address urgent humanitarian needs, instill confidence in the banking sector, pay salaries of key public-sector workers and free up liquidity in the economy."

The U.K. stopped the export of the notes, which had been produced in Britain, on Feb. 27. Chancellor of the Exchequer George Osborne said in March that the money, which also included coins produced by The Royal Mint, would be returned to the Libyan people once Qaddafi was ousted.

"This is not money we seize, this is money we freeze, we're able to hand it back to the Libyan people when Qaddafi leaves," Osborne told Sky News television on March 6.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net