Libya's Interim Government in the east can no longer borrow money from the central bank it set up in 2014 except to pay state salaries, the bank has said, suggesting the east may face significant financial problems.
The bank said on Monday that the Benghazi government could not continue to borrow from the bank and should seek alternative sources of funding to finance the budget.
It later clarified to Reuters that this would not affect government borrowing to cover public sector wages, but that the government must provide it with data on these.
The Libyan state is divided between the Tripoli-based Government of National Accord (GNA) in the west, which is internationally recognised, and a parallel government in the east, each of which has a central bank.
Most state revenue in recent years has come from energy sales by the National Oil Company (NOC), which produces mostly from oilfields in areas controlled by eastern forces, but is based in Tripoli.
That money goes to the Tripoli government's Central Bank of Libya, which has said it still pays for public sector salaries across the whole country for employees taken on before 2014, when the parallel eastern government emerged.
The eastern central bank said it now pays all public sector salaries in the east. The Tripoli-based Central Bank of Libya did not immediately respond to requests for comment.
Since 2014, the east has hired thousands of soldiers and civil servants to staff its new government ministries, whose salaries it pays. It has raised billions of dollars in debt to finance this, often through its own central bank.
The eastern central bank governor last year told Reuters that it had been spending 400 million Libyan Dinars ($289.39 million) a month on public salaries and basic services. ($1 = 1.3822 Libyan dinars)