The dinar is the official currency of Libya. It is a decimal currency, but the subunit, the dirham, is 1/1000 dinar rather than 1/100, as are most currency subunits. The dinar was introduced in 1971 as a replacement of the Libyan pound following the revolution of 1969. The Central Bank of Libya is the issuing agency of the dinar, but it is 100 percent owned by and funded with capital from the Libyan government.
In the 19th century, Libya was part of the Ottoman Empire and used the Ottoman qirsh as currency. In 1911, when the country was taken by Italy, the Italian lira became the national currency. During World War II, Libya was liberated from the Italians and split into French and British territories, with Algerian francs used on the French side and Tripolitanian lira issued by the British military used on the other. In 1949, the United Nations resolved that Libya should be free and independent, implementing a constitutional monarchy in 1951. The Libyan pound was introduced at this time at the rate of 1 pound: 480 lira or 980 francs.
When the monarchy was overthrown in a bloodless military coup in 1969, the pound continued to serve as the national currency until it was replaced in 1971, on par, with the Libyan dinar. At that time, the Central Bank of Libya, which had operated since 1956, was nationalized but continued its primary functions: issuing currency, maintaining the stability of currency, managing gold and foreign reserves and acting as a banker to commercial banks.
The economy of Libya is based on oil, with oil exports comprising most the country’s income. However, most oil revenues go directly to the government of Muammar Qaddafi, the leader of Libya since the coup of the monarchy in 1969. For many years, Libya was the wealthiest country in Africa and one of the wealthiest countries of the world, but very little of the wealth has ever trickled down to the masses. Poverty remains high and is the leading cause of the Libyan civil war begun in 2011. Before the war, tourism was on the rise, but continued fighting has dashed this industry for the time being.