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Lebanon economy

Lebanon’s central bank announces new foreign exchange system

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Lebanon, whose currency has collapsed amid a deep financial crisis, is launching a scheme to obtain dollars via banks at a rate similar to levels offered by unofficial dealers.

President Michel Aoun said in March that banks would be allowed to handle transactions at market rates, but the central bank has only issued mechanisms in past weeks for the exchange platform.

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The central bank said in a statement on Thursday that Lebanese seeking dollars could register to buy the US currency at a rate of 12,000 to the dollar from participating banks from May 21-25. They would receive the dollars on May 27, it said.

It did not say whether customers would in future also be able to use the central bank’s new Sayrafa platform to receive Lebanese pounds when selling dollars at a similar rate.

Until the economy was crushed by debt in late 2019, the Lebanese pound was freely traded at banks, shops and elsewhere at 1,500 to the dollar. Since then, the street rate has plunged, trading around 12,800 on Thursday. Banks have faced limits on the rates they use, with some deals allowed at 3,900.

The crisis has plunged swathes of the nation into poverty, and the Lebanese - many of whom held savings in dollar accounts - now face restrictions on access to their foreign exchange, with limits both on withdrawals and on the bank rate offered.

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