Lebanon’s Currency Crisis Sparks Jitters
US dollar scarcity in the Lebanese market has forced some banks to withhold the foreign currency from everyday use.
Such banks have only allowed customers to withdraw in Lebanese lira all remittances sent in dollar from abroad, preventing them from withdrawing dollars from ATMs.
Banks also placed a ceiling on clients when withdrawing US dollars from their accounts.
The policies to block the dollar, particularly among merchants, drove people to trade their Lebanese liras at exchange firms for LL1,600 against the dollar, exceeding the daily LL1,507 benchmark set by the Central Bank.
Several sectors sounded the alarm this month, including an open-ended strike announced Thursday by Lebanese gas station owners due to a shortage in dollar reserves that has made it difficult to pay suppliers.
Gas stations in Lebanon are paid by customers in Lebanese pounds but must pay suppliers in US dollars.
But the syndicate of gas station owners suspended the strike on Friday.
Similar to gasoline importers, wheat importers say they cannot secure the requisite US dollars needed to pay for the import of wheat at the price set by the Central bank.
The series of strikes and warnings pushed the Central Bank to issue a statement on Thursday announcing that it would organize the funding of imports of wheat, medicine and fuel in dollars as of next Tuesday.
A leading merchant in Beirut told Asharq Al-Awsat that the Bank’s intervention could be the start of a fierce rationing on imports.
“Such measures are usually taken to curb the level of imports with an aim to bring down the trade deficit and the balance of payments,” the merchant said, adding that this policy would not solve the problem.
In a related development, a source said the visit of US Treasury Department Assistant Secretary Marshall Billingslea to Beirut early this week, came to warn Lebanese banks from selling US dollars to Syrians placed on the US sanctions lists.
Economic researcher Dr. Makram Rabah said that the dollar crisis aggravated in Lebanon after some merchants began buying dollars in the Lebanese black market to ensure fuel to the Syrian market.
“The Lebanese people are paying the price of some greedy merchants and the Bashar Assad regime, which is using Lebanon to evade sanctions,” he said.