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Lebanon’s Government Tries to Curb USD Exchange Rate by Pursuing Money Changers

Lebanon’s Government Tries to Curb USD Exchange Rate by Pursuing Money Changers

Thursday, 30 January, 2020 - 11:45
FILE PHOTO: A money exchange vendor displays Lebanese pound banknotes at his shop in Beirut, Lebanon, November 8, 2017. REUTERS/Mohamed Azakir/File Photo

The Lebanese state is seeking to control the rise in the value of the US dollar against the local currency by clamping down on money changers who have failed to adhere to the limits set by the central bank and the Lebanese Money Changers Association.

 

Last week, the Association said it had agreed with the central bank on “an exchange rate for the US dollar capped at 2,000 Lebanese pounds,” which was not respected by all.

 

The Lebanese pound is officially maintained at a rate of 1,517 to the dollar, but the country’s worsening economic situation has sent the currency into a sharp decline in foreign exchange offices.

 

But as the central bank has refrained from pumping the dollar into the Lebanese market, and the banks imposed severe measures on the depositors, the Lebanese people resorted to the black market as an alternative solution, selling the dollar to the money changers at a value of LBP2,150, or buying it at LBP2,300.

 

In a recent move, Financial Prosecutor Ali Ibrahim pressed charges against six money changers for violating the law and working without permits from the central bank. Those were referred to the competent judicial authorities for trial.

 

A banking source told Asharq Al-Awsat that banks “don’t know the source of the dollars that are available at the money exchange offices.”

 

“There is no doubt that an important part of these dollars is purchased by exchange offices from the citizens who are buying the local currency, but not all exchanged money is from such transactions,” according to the source.


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