Lebanon Central Bank to Unify Parallel FX Rate, Let Small Depositors Cash out

People queue outside a bank in Beirut on March 29, 2020. (AFP)
People queue outside a bank in Beirut on March 29, 2020. (AFP)
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Lebanon Central Bank to Unify Parallel FX Rate, Let Small Depositors Cash out

People queue outside a bank in Beirut on March 29, 2020. (AFP)
People queue outside a bank in Beirut on March 29, 2020. (AFP)

Lebanon's central bank said on Friday it was launching a foreign exchange unit to centralize the price of dollars for money-changers, part of efforts to rein in the parallel market as hard currency runs short amid a deepening financial crisis.

In a separate circular, it said deposits of $3,000 or less could be withdrawn in Lebanese pounds at a "market" rate, allowing small depositors to cash out despite tight banking controls.

The measure could relieve many Lebanese depositors who have had to stand by as the value of their savings tumbled, hit by price hikes, a weakening currency and withdrawal caps as little as $100 a week.

While neither circular defined the "market" rate, analysts said it would likely reflect the parallel market, where the pound has traded around 2,800 pounds to the dollar, nearly 50% weaker than the official peg of 1,507.5 in place since 1997.

The currency has come under even more pressure during Lebanon's coronavirus lockdown, with banks halting access to already scarce dollars.

Central Bank Governor Riad Salameh told Reuters the peg would remain in place for bank transactions and critical imports - wheat, medicine and fuel. "We will choose the dealers with which we transact. We work on banknotes only at market rate. We buy and sell," Salameh said of the new FX unit.

Two government sources said about 60% of all bank accounts would be allowed full withdrawal. The sources said dollar deposits covered by Friday's directive amount to some $350 million.

"This is a boost for small depositors, to their purchasing power," said Nassib Ghobril, chief economist at Byblos Bank.

Ghobril said the FX measures were a "temporary" fix to address liquidity problems until the government secures badly needed foreign aid under a broad rescue plan.

Last month, Lebanon declared it could no longer pay its hefty foreign debt and launched talks with creditors.

The currency has slumped since October, after capital inflows dried up and protests erupted against the ruling elite.

Authorities sought in recent weeks to enforce a rate of 2,000 pounds per dollar on the parallel market, now people's main source of cash. Traders still sold at higher rates, with some shut down.

Friday's measures also allow paying out deposits of 5 million Lebanon pounds or less. It said this would be done by converting the funds first to US dollars at the peg and then to Lebanese pounds at the day's market rate.



Diriyah Company Awards Major Contract for Landmark Arena Project

The Diriyah Arena will boost the quality of life in Diriyah by providing a space for residents and visitors to enjoy events. (SPA)
The Diriyah Arena will boost the quality of life in Diriyah by providing a space for residents and visitors to enjoy events. (SPA)
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Diriyah Company Awards Major Contract for Landmark Arena Project

The Diriyah Arena will boost the quality of life in Diriyah by providing a space for residents and visitors to enjoy events. (SPA)
The Diriyah Arena will boost the quality of life in Diriyah by providing a space for residents and visitors to enjoy events. (SPA)

Saudi Arabia’s Diriyah Company has awarded a contract worth SAR5.75 billion to the branch of China Harbour Engineering Company Ltd. for the construction works of the Arena Block, a district that includes the multi-purpose indoor Diriyah Arena, three mixed-use office buildings, and a parking facility.

Diriyah Arena will have a gross floor area of approximately 74,000 square meters and is designed as a flexible and scalable venue to accommodate events such as concerts, sporting events, esports competitions, exhibitions, and live shows, said a statement from Diriyah Company on Wednesday. With a seating capacity of 20,000 spectators, it aims to attract residents and visitors from around the world.

Designed by the renowned global architecture firm HKS Inc., the Diriyah Arena’s design draws inspiration from the natural geology surrounding Diriyah, while honoring traditional Najdi architectural elements, to create a harmonious blend of heritage and modernity.

The Diriyah Arena will boost the quality of life in Diriyah by providing a space for residents and visitors to enjoy events, fostering a sense of community spirit, and contributing to the overall well-being of the area.

In addition to the Diriyah Arena, the Arena Block development will include three mixed-use office plots designed by international architects John McAslan + Partners, covering approximately 114,000 square meters, supported by state-of-the-art technology and infrastructure. The contract also includes over 4,000 parking spaces to support both Diriyah Arena events and office facilities.

Diriyah Company Group CEO Jerry Inzerillo stated: “The Diriyah Arena will be a landmark entertainment complex in Diriyah that reinforces the City of Earth’s growing global role in shaping Saudi Arabia’s artistic and cultural future, in alignment with Vision 2030.”

“By attracting both residents and global visitors to experience world-class sports and performances, the Diriyah Arena firmly demonstrates our commitment to creating a world-leading gathering place,” he added.

General manager of China Harbour Engineering Company Ltd. (Middle East) Yang Zhiyuan said: “This award marks a significant milestone for CHEC in the Kingdom. CHEC will bring to the project a wealth of global experience, technical expertise, and a proven track record of delivering successful projects.”

“We will mobilize the best resources and talents from across our international network and strive for excellence to ensure the successful and timely delivery of this world-class Arena. We will continue to deliver excellence in support of Vision 2030. We are deeply proud to be part of this initiative,” he remarked.

The contract is the latest in a series of major announcements so far in 2025 as Diriyah Company continues to accelerate its development program for Diriyah, realizing milestone after milestone.

The Diriyah Arena will join world-class cultural and entertainment assets in Diriyah, including the Royal Diriyah Opera House, nine museums, and academies, all featuring Najdi architectural elements inspired by the At-Turaif UNESCO World Heritage Site.