The Lebanese central bank set an exchange rate of 3,625 Lebanese pounds per dollar to be applied by money-transfer firms on Friday, a central bank source said, 58 percent weaker than the official peg as the country grapples with a financial crisis.
The new rate applies to money sent through wire transfer offices, which are used by many Lebanese abroad to send money to family at home.
The Lebanese pound has slumped on a parallel market since October, when the country’s long-brewing economic troubles came to a head, prompting a financial and banking crisis considered the biggest risk to stability since the 1975-90 civil war.
The authorities are still applying the official peg of 1,507.5 pounds per dollar for essential imports – fuel, wheat, and medicine – in an effort to slow spiraling inflation in the import-dependent economy.
“Prices may change every day and will be set the day before,” the central bank source said, adding that the rate reflected the price dollars were fetching at foreign exchange offices. “In the event that there are major fluctuations during the day, the price may be set again during the same day.”
With dollars in short supply, the central bank earlier this month said the money-transfer services must issue cash in the local currency at a “market rate.”
Earlier this week, the central bank also said depositors with dollar accounts in Lebanon would be paid cash in pounds, also at a “market rate,” within each bank’s withdrawal limits.
Banking sources said they expected the rate applied to such withdrawals to be close to the rate set by the central bank for wire transfer firms. Banks, exchange dealers and the central bank will meet on Monday to make a decision.
Parliament speaker Nabih Berri urged the government on Thursday to use its legal powers to halt the pound’s “dramatic collapse” before it is “too late.”
Finance Minister Ghazi Wazni told al-Joumhuria newspaper on Friday the fall could not be attributed to economic, financial or monetary reasons and said it was down to “strong speculation and manipulation in the market.”
“This increased the fear of citizens and their concern, which brought about an increase in demand for the dollar.”
Foreign currency dealers are on strike until Monday “to warn about the continued deterioration of the exchange rate,” their syndicate announced late on Thursday.
‘Hunger worse than coronavirus’ protesters near Lebanon’s Central Bank sayDozens of protesters have broken coronavirus locdown orders to demonstrate in front of the Lebanese central bank in Beirut amid growing anger against ... Coronavirus
Four coronavirus cases in Lebanon Palestinian refugee camp: Health officialFour residents of a Palestinian refugee camp in Lebanon tested positive for the novel coronavirus on Thursday, a health official said, bringing total ... Coronavirus
Recent killing in Lebanon sheds light on honor killings in the countryThis week’s mass murder in the Lebanese area of Baakline is a reminder that honor killings, while less frequent in Lebanon compared to other Arab ... Middle East
Last day to withdraw transferred dollars in Lebanon, long lines at transfer shopsCrowds lined up in front of some money transfer offices Thursday in Lebanon, the last day before a decision takes effect that will require all ... Economy