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Lebanon’s National Currency Tumbles as Central Bank Issues ‘Ambiguous’ Measures

Lebanon’s National Currency Tumbles as Central Bank Issues ‘Ambiguous’ Measures

Sunday, 13 November, 2022 - 09:00
The Lebanese pound at its worst (AFP)

The Lebanese pound exchange rate on the black market has slid to nearly LBP 40,000 to the US dollar amid conflicting reports about a delay in new regulatory measures that the Central Bank is preparing to take, which requires raising the price of allowances for withdrawals from hard currencies.

In parallel, authorities have started to work on collecting customs duties for imports with a rate of 15,000 to the US dollar.

Lebanon’s Central Bank had said it would halt purchases of dollars on its Sayrafa platform starting on Oct. 25 until further notice. The bank, however, would continue to sell exclusively dollars on its exchange rate platform.

Although the move was intended to strengthen the Lebanese pound, observers believe that money exchangers increasingly buying US dollars is an indication that the national currency will soon hit new lows.

A banking official explained to Asharq Al-Awsat that the “ambiguity” arising from the overlapping of monetary decisions “still prevents the possibility of determining the expected timing of the issuance of new measures.”

Despite impressions that measures were officially approved at the beginning of this month, it was reported that government agencies instructed the bank to slow down a little, in order to simultaneously link the validity of the financial steps related to the general budget with the monetary measures for withdrawals.

This reinforced expectations that the promised circulars will be issued before the middle of November.

Speaking to Asharq Al-Awsat under the conditions of anonymity, the banker asserted that leaks from relevant sources at the Central Bank “match expectations for adopting a higher exchange rate for withdrawals from dollar accounts in Lebanese banks as a first step within the task of reorganizing exchange rates.”

Besides preparing for the unifying of exchange rates, the Central Bank is looking to implement a basic demand from the package of conditions handed over by the International Monetary Fund (IMF) mission in Lebanon.

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