Lebanon's Central Bank Offers Dollars as Financial Crisis Worsens

A view shows the Central Bank building, in Beirut, Lebanon November 12, 2020. Picture taken November 12, 2020. REUTERS/Mohamed Azakir
A view shows the Central Bank building, in Beirut, Lebanon November 12, 2020. Picture taken November 12, 2020. REUTERS/Mohamed Azakir
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Lebanon's Central Bank Offers Dollars as Financial Crisis Worsens

A view shows the Central Bank building, in Beirut, Lebanon November 12, 2020. Picture taken November 12, 2020. REUTERS/Mohamed Azakir
A view shows the Central Bank building, in Beirut, Lebanon November 12, 2020. Picture taken November 12, 2020. REUTERS/Mohamed Azakir

Lebanon's central bank said on Thursday it would sell US dollars to commercial banks at the rate on its Sayrafa foreign exchange platform, but analysts said offering more hard currency would do little to steady the already crippled Lebanese pound.

Lebanon's economy has been in freefall since 2019, when a mountain of debt and political gridlock, drove the nation into its deepest crisis since the 1975-1990 civil war.

The Lebanese pound, which was exchanged freely at 1,500 to the dollar before the crisis, has collapsed to around 25,000 on the unofficial market. On the central bank's foreign exchange platform, known as Sayrafa, Thursday's rate was 22,300, Reuters reported.

Beirut-based financial adviser Mike Azar said the central bank's latest move was "to stabilize the lira but an insolvent bank that is bleeding FX ... cannot stabilize the currency by market intervention. It has no credibility."

As Lebanon plunged into crisis, depositors - many of whom had dollar accounts - were locked out of their savings and only allowed to withdraw them in Lebanese pounds at a rate that was far below the unofficial exchange rate on the street.

Last week, the central bank said depositors withdrawing from their dollar accounts would receive Lebanese pounds at a rate of 8,000 to the dollar, an improvement on the previous rate of 3,900, but still well below the street rate or Sayrafa rate.

In Thursday's statement, the central bank said depositors could use Lebanese pounds they had withdrawn to buy back dollars but at the Sayrafa rate, effectively meaning they receive a roughly 70% 'haircut' on the value of their original dollar deposit.

Meanwhile, the International Monetary Fund (IMF) has been briefed about the losses that Lebanon has acknowledged in its financial sector and is reviewing them, Lebanese media quoted the fund's director of communications, Gerry Rice, as saying on Thursday.

Lebanese officials have agreed that losses in the country's financial sector amount to between $68 billion and $69 billion, Deputy Prime Minister Saadeh al-Shami told Reuters on Tuesday.



Saudi Arabia Issues New Industrial Licenses for Aircraft Maintenance and Repair

The announcement was made during the first edition of the Aerospace Connect Forum in Jeddah. (SPA)
The announcement was made during the first edition of the Aerospace Connect Forum in Jeddah. (SPA)
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Saudi Arabia Issues New Industrial Licenses for Aircraft Maintenance and Repair

The announcement was made during the first edition of the Aerospace Connect Forum in Jeddah. (SPA)
The announcement was made during the first edition of the Aerospace Connect Forum in Jeddah. (SPA)

The Saudi Ministry of Industry and Mineral Resources announced the issuance of new industrial licenses for aircraft maintenance, repair, and overhaul (MRO) services in the Kingdom.

The announcement was made during the first edition of the Aerospace Connect Forum, held in Jeddah under the patronage of Minister of Industry and Mineral Resources Bandar Alkhorayef and organized by the National Industrial Development Center (NIDC).

The newly introduced industrial licenses, launched in collaboration with the General Authority of Civil Aviation and the General Authority for Military Industries, cover various activities, including aircraft and drone maintenance and repair, navigational and electronic systems servicing, and comprehensive aircraft overhaul operations, said the ministry.

The new licenses will allow investors to benefit from the advantages of industrial licensing, access government incentives and capabilities, and contribute to the development and localization of the Kingdom’s aviation industry—a key sector targeted in the National Industrial Strategy.