The price of the US dollar on the exchange market in Lebanon in the past few days has touched 2,500 Lebanese pounds (LBP), an unprecedented figure since the end of the civil war nearly 30 years ago.
Despite the stability of the official price at the threshold of 1,500 LBP, the Lebanese are very concerned over chaos in the market, especially since the vast majority of them receive their salaries in the local currency.
Recent media remarks by central bank governor Riad Salameh, in which he tried to reassure the Lebanese about the fate of their bank deposits and the availability of liquidity, did not alleviate concerns that the dollar would touch the threshold of 3,000 LBP, double the official price.
The head of the Syndicate of Exchange Offices, Mahmoud Murad, tried to ease concerns, stating that the rise in the price of the dollar fell within the supply and demand equation, which usually controls markets and is affected by the prevailing security and political conditions.
“Money exchange offices are not responsible for the rise in the exchange rate, as the profit margin for them has not changed,” he told Asharq Al-Awsat.
There are only 305 exchange offices affiliated with the syndicate, according to Murad, while between 200 and 300 others are working without a license.
Financial and Economic Expert Dr. Charbel Qordahi stressed that the central bank and the Banking Supervision Authority were legally the two bodies responsible for regulating the exchange sector. But he added that forcing the exchange offices to fix the exchange rate would lead to adverse results such as the emergence of a black market.
“Stabilizing the exchange rate can only be done by securing the necessary liquidity in dollars,” Qordahi noted.
Reflecting a hard currency shortage, commercial banks have gradually reduced the amount of dollars customers can withdraw since October. For most, the cap is now 200 dollars a week.
Lebanon is facing the worst economic crisis since its 1975-90 civil war, rooted in decades of rampant state corruption and bad governance that have landed the country with one of the world's heaviest public debt burdens.