Source: Beirut – Reuters
The Central Bank of Lebanon has announced the launch of a foreign exchange unit to control the dollar rate of exchange, as part of efforts to curb the parallel market in light of a deficit in the hard currency amid a deepening financial crisis.
A separate circular said that deposits less than $ 3,000 in Lebanese pounds could be withdrawn at the “market” price, which would allow small depositors in the country to obtain their savings in cash despite tight banking restrictions.
The circular did not specify the market price.
“We will choose the dealers we will deal with. We work in banknotes at the market price only. We buy and sell,” Central Bank of Lebanon Governor Riad Salameh told Reuters.
He added that the official rate of the Lebanese currency will be maintained in transactions of banks and vital imports: medicines, fuel and wheat.
The Lebanese pound was officially pegged at 1507.5 against the US dollar 22 years ago, but in recent months it has been widely circulated in an informal parallel market that has become the main source of cash for citizens during the crisis.
Its value in that market has tumbled nearly 50% against the official exchange rate since October, after foreign investment inflows scarred and anti-government protests erupted.
The currency traded at about 2,800 pounds to the dollar in the informal market in recent days, despite efforts by the authorities to impose an exchange rate of two thousand pounds to the dollar.
A senior government source told Reuters today that the central bank’s procedures will allow a complete withdrawal of about 60% of total deposits in banks.
In recent months, banks imposed a ceiling on cash withdrawals of $ 100 a week as the crisis grew.
The source also said that the market price of the Lebanese pound will be determined on a daily basis, and that the role of the exchange that does not adhere to will revoke its licenses.
The second circular said that banks must now disburse deposits of no more than 5 million Lebanese pounds when requested by clients.
He added that this will be done by transferring the amounts first to the US dollar at the peg price, and then transferring it to the Lebanese pound according to the market price on the date of the withdrawal request.
The stricken currency is under more pressure in light of the general isolation measures in Lebanon due to the Corona virus, as banks prevent the obtaining of the already scarce dollar, which increases the cost of imports that the heavily indebted country depends on.