Asharq Al-awsat English https://aawsat.com/english Middle-east and International News and Opinion from Asharq Al-awsat Newspaper http://feedly.com/icon.svg

Different Exchange Rates in Cash-Strapped Lebanon

Different Exchange Rates in Cash-Strapped Lebanon

Monday, 6 April, 2020 - 09:15
FILE PHOTO: A woman uses an automated teller machine (ATM) of Bankmed in Beirut, Lebanon, March 3, 2020. REUTERS/Aziz Taher
Asharq Al-Awsat

Lebanese banks are to apply an exchange rate of 2,600 pounds per dollar for withdrawals from small accounts of up to 5 million Lebanese pounds, a central bank source said on Monday, in the implementation of a new circular issued on Friday.


Lebanon is still applying an official peg of 1,507.5 pounds to the dollar for bank transactions and critical imports, the governor said on Friday.


But the circular issued on Friday said deposits of $3,000 or less could be withdrawn in Lebanese pounds at a "market" rate, allowing small depositors to cash out despite tight banking controls. It also allowed for the paying out of deposits of 5 million Lebanese pounds or less.


A senior banking source said this rate would be fixed on a weekly basis and had this week been fixed at the 2,600 rate.


Banks in Lebanon have suspended dollar withdrawals until the airport reopens.


The flight hub is to remain closed until at least April 12, a date until which all non-essential workers have been told to remain at home across the country.


Coronavirus is the latest crisis to hit Lebanon, already reeling from mass anti-government protests and in the grips of the worst economic crunch since its 1975-1990 civil war.


For decades, the Lebanese pound has been used interchangeably with the dollar at a fixed exchange rate of 1,507.5 pounds to the greenback.


But a liquidity crisis had seen banks gradually restrict access to dollars and halt transfers abroad since the autumn, leading the value of the Lebanese pound to plummet on the black market.


A dollar is now worth more than 2,700 pounds on the black market and prices have shot up in recent months.


Editor Picks

Multimedia