'No Dollars Today': Exchanges Resist Lebanon's Push to Steady Currency

Lebanon’s union of exchange dealers said it agreed with the central bank to set a maximum buying price of 2,000 Lebanese pounds to the dollar. (AFP)
Lebanon’s union of exchange dealers said it agreed with the central bank to set a maximum buying price of 2,000 Lebanese pounds to the dollar. (AFP)
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'No Dollars Today': Exchanges Resist Lebanon's Push to Steady Currency

Lebanon’s union of exchange dealers said it agreed with the central bank to set a maximum buying price of 2,000 Lebanese pounds to the dollar. (AFP)
Lebanon’s union of exchange dealers said it agreed with the central bank to set a maximum buying price of 2,000 Lebanese pounds to the dollar. (AFP)

A push by Lebanon to rein in a thriving parallel market for dollars and halt the slide of its slumping pound hit a snag on Wednesday when currency dealers largely refused to sell at a new, lower price agreed with the central bank.

Lebanon is in the throes of a deep economic crisis that has prompted banks fearing capital flight to put stiff controls on dollars, forcing everyone from major importers to average Lebanese to turn to exchange bureaus to meet their needs.

Since mass protests against the country’s elite erupted in October, the dollar price on this parallel market has soared, hitting as high as 2,500 pounds to the dollar versus an official rate of 1,507.5 in place since 1997, hiking prices.

Lebanon is hoping a new government formed on Tuesday will restore confidence to secure urgently needed foreign funds and stabilize its currency and banks.

Looking to stem the currency’s fall, Lebanon’s union of exchange dealers said shortly before the cabinet was announced that it agreed with the central bank to set a maximum buying price of 2,000 Lebanese pounds to the dollar.

It said violators would be subject to unspecified “legal and administrative” penalties.

On Wednesday, dollars once easily attained at Beirut’s buzzing exchanges were elusive, potentially posing a new challenge for Lebanese hit by the worst financial strains since a 1975-1990 civil war.

Losses

Eight of 10 currency bureaus visited by Reuters said they did not have dollars for sale but were willing to purchase dollars at the new price of 2,000 Lebanese pounds. Several customers were seen selling dollars at the new rate.

Other dealers said the price control would force the market underground, pushing transactions outside exchange bureaus.

“It is going to create a third market, a parallel market to the parallel market. It is not very realistic,” said a second dealer.

While two bureaus in Beirut’s Hamra district were selling small quantities of dollars to customers at rates of 2,050 and 2,075, while buying at 2,000, five others were turning customers away with a terse: “No dollars today.”

Some dealers said the snap decision to impose a price ceiling meant the dollars they purchased a day earlier at a higher rate of 2,170-2,180 pounds would leave them with losses.

“No one is selling today because we are trying to gather dollars at 2,000 to sell them,” said one dealer. “The price has to come down before we can sell at around 2,000,” he said.

New finance minister Ghazi Wazni threw cold water on hopes the pound could return to pre-crisis levels, telling local broadcaster LBCI “it is impossible for the dollar to return to what it was before” on the parallel market.

Central bank governor Riad Salameh has insisted import-dependent Lebanon will stick by the peg, citing the need to keep in check the price of staple goods like fuel.



China’s Economy Set to Slow in Q2 as Pressure from US Tariffs Mounts

 A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
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China’s Economy Set to Slow in Q2 as Pressure from US Tariffs Mounts

 A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)
A laborer works on the glass wall of a building near a luxury brand logo in Beijing, China, Friday, July 11, 2025. (AP)

China's economy is likely to have cooled in the second quarter after a solid start to the year, as trade tensions and a prolonged property downturn drag on demand, raising pressure on policymakers to roll out additional stimulus to underpin growth.

The world's No. 2 economy has so far avoided a sharp slowdown in part due to a fragile US-China trade truce and policy support, but markets are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low.

Data due Tuesday is expected to show gross domestic product (GDP) grew 5.1% year-on-year in April-June, slowing from 5.4% in the first quarter, according to a Reuters poll. The projected pace would still exceed the 4.7% forecast in a Reuters poll in April and remains broadly in line with the official full-year target of around 5%.

"While growth has been resilient year-to-date, we still expect it to soften in the second half of the year, due to the payback of front-loaded exports, ongoing negative deflationary feedback loop, and the impact of tariffs on direct exports to the US and the global trade cycle," analysts at Morgan Stanley said in a note.

"The third-quarter growth could slow to 4.5% or lower, while Q4 faces unfavorable base effect, putting the annual growth target at risk," the analysts said. They expect Beijing to introduce a 0.5-1 trillion yuan ($69.7 billion-$139.5 billion) supplementary budget from late in the third quarter.

China's exports regained some momentum in June while imports rebounded, as factories rushed out shipments to capitalize on a fragile tariff truce between Beijing and Washington ahead of a looming August deadline.

GDP data is due on Tuesday at 0200 GMT. Separate data on June activity is expected to show both industrial output and retail sales slowing.

On a quarterly basis, the economy is forecast to have expanded 0.9% in the second quarter, slowing from 1.2% in January-March, the poll showed.

China's 2025 GDP growth is forecast to cool to 4.6% - falling short of the official goal - from last year's 5.0% and ease even further to 4.2% in 2026, according to the poll.

BALANCING ACT

Investors are closely watching for signs of fresh stimulus at the upcoming Politburo meeting due in late July, which is likely to shape economic policy for the remainder of the year.

Analysts polled by Reuters expect a 10-basis point cut in the seven-day reverse repo rate - the central bank's key policy rate - in the fourth quarter, along with a similar cut to the benchmark loan prime rate (LPR).

Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from US President Donald Trump's trade tariffs.

But China observers and analysts say stimulus alone may not be enough to tackle entrenched deflationary pressures, with producer prices in June falling at their fastest pace in nearly two years.

Expectations are growing that China could accelerate supply-side reforms to curb excess industrial capacity and find new ways to boost domestic demand.

It's a stiff challenge, analysts say, as Chinese leaders face a delicate balancing act in their quest to cut production while maintaining employment stability in the face of a worsening labor market outlook.