Money changers return to business committing to a unified pricing, rationalizing the sale of the dollar, for specific purposes and documented reasons

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The money changers returned to work again after a strike that lasted for more than a month, so that banking institutions and companies would return with them within a specific work mechanism regarding the exchange rate of the dollar against the lira, in implementation of the intermediate circular 553 and the decisions of the meeting held in the Government House on May 30 last. In the details of the mechanism that the money changers started adopting in terms of the dollar exchange rate, the union is expected to announce every morning for one working day, a moving margin of the exchange rate between buying the dollar at a minimum and selling it at a maximum, and announce again the price adjusted daily according to developments, in the context of the endeavor Sadiq to abide by the intermediate circular 553 issued by the Governor of the Banque du Liban and binding to the money changers, which requires them to adhere to the maximum exchange rate of the dollar at 3200 pounds for the sale, which means that the purchase price must be less than the level of 3200 pounds for the dollar, provided that this circular is applied until 27 October 2020. At a time the Syndicate of Money Exchange Syndicates confirmed directly the exchange at an exchange rate of 3200 liras, as the cashiers have dollars that they bought at a price higher than this price, it was agreed that the exchange rate reduction in the parallel market would be gradual, to reach the level specified in the circular by the end of next week .

A member of the Currency Exchange Association, Mahmoud Halawi, affirms, “The commitment of legal money changers to this mechanism.” The lira, by restricting the sale of the dollar to individuals and companies that provide the necessary official documents to prove the need for it, including for example what concerns the state’s need to finance the import process or secure hard currency to transfer money abroad to cover the costs of education or hospitalization or the payment of obligations, taxes and other expenses that Whoever requests the dollar must submit the necessary documents to justify the purchase process and other necessities coupled with official evidence and proofs, or sign a pledge to use them for purposes that are specified in the pledge, so that the cashiers keep all the restrictions, documents and documents related to all operations, according to the circulars of the Banque du Liban and the Banking Supervision Committee. . Halawi also confirms “continuous coordination with the Bank of Lebanon and the Banking Control Committee, and meetings will be held between the Money Exchange Union and the Minister of Interior and Municipalities to assess the measures taken to pursue money-changers who are speculating on the Lebanese pound or who work in the black market.”

Yesterday, banks and banking companies dealt with their work with their commitment to the declared price, according to their daily purchases and sales, as pricing for the exchange rate of the dollar against the lira was approved on Wednesday 03-06-2020 exclusively, with a moving margin between buying at a price of 3950 as a minimum and selling at 4000 max. The market is also awaiting the mechanism of operation of the electronic platform established by the Central Bank based on Circular 149, which contributes to determining the exchange rate.

“Despite the principals’ commitment to this circular, prices remain determined by the laws of supply and demand. As with any commodity, as long as the demand for it is increasing and its supply decreases, its true value will continue to rise,” said Dr. Mohamed Hussein Mansour, a political economist and former adviser to the World Bank. Among the most important factors of economic power that can help in reducing the depreciation of the lira is the trust factor that must be built on real foundations and strong economic factors, which is still not present. He explains that the real goal of the online platform is to “stabilize the exchange rate in the short term until a real solution to the economic problem is represented by finding resources to increase the hard currency in the Lebanese market, and the fear here is that the solutions will be delayed, especially with the difficulty of negotiations with the International Monetary Fund, and the uncertainty in Achieving positive results with him increases doubts about the feasibility of negotiations with the Fund due to the following factors: Disagreement by some parties in the government such as Hezbollah. Political entanglement between the main parties, which may weaken the Fund’s confidence in the government and its ability to honor its pledges, corruption in all corners of the entity The Lebanese government and the popular objections that can result from the harsh conditions of the fund, and to these factors, one of the conditions of the fund in circulation is the liberalization of the dollar exchange rate against the lira, and this condition, if passed, would undermine all attempts of the central bank and the government to install or contain the exchange rate, especially in Its impact on confidence in the future of the lira. “







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