Authorities in Lebanon announced a crackdown on people circulating misinformation about the exchange rate on social media as the local currency rapidly loses value.
Last week, a panic set in and sometimes-violent protests ensued after the price of the dollar on the black market rose to more than 5,000 lira, while rumors circulated on social media that it had gone as high as 7,000 in some places.
The official exchange rate remains pegged at about 1,500 lira to the dollar.
Lebanese General Security on Tuesday announced that it had set up a joint operations room “to follow up on attempts to manipulate the [Lebanese British Pound] LBP rate against the US dollar.”
According to the National News Agency, State Prosecutor Ghassan Oueidat issued a warrant to the Director General of General Security to investigate people who had spread rumors Thursday on “social media and other means of publication about the loss of the dollar from the market and the rise in its exchange rate to 7,000 Lebanese lira with the goal of creating confusion and panic…and manipulating the price of buying the dollar and the price of selling after artificially inflating it.”
The statement noted that the ensuing panic had resulted in more people trying to withdraw their money from banks to buy dollars and had led to an “unjustified rise in the prices of consumer goods and some merchants stopped delivery of those goods.”
Licensed exchange houses are supposed to follow a daily rate announced by the Syndicate of Money Changers in Lebanon each day.
As of Tuesday, the syndicate rate was 3,860 to buy dollars and 3,910 to sell. The rate decreases slightly each day, with the ultimate goal of stabilizing at 3,200.
According to the site lebaneselira.org, which tracks fluctuations in the price of the dollar based on crowdsourced reports, the black-market selling price of the dollar had risen to an average of 5,500 on Friday and stood at 5,100 on Tuesday.
The plans to crack down on social media rumors about the currency came a day after Oueidat also announced plans to investigate posts deemed insulting to President Michel Aoun, who could face prosecution for defamation, slander, and libel. The decision provoked widespread criticism among journalists and free speech advocates.
Some also criticized the decision to go after those who spread misinformation about the exchange rate. Kulluna Irada, a government watchdog group, said in a statement that the move “poses a threat of censorship.”
“This opens the door to a suppression of free speech and will only increase uncertainty surrounding exchange rates,” the group wrote.
Apart from cracking down on the spread of rumors online, security forces have been cracking down on illegal money changing operations and government officials announced plans for the Central Bank to pump dollars into the market in order to bring the rate down.
In the statement, Kulluna Irada also critiqued those measures.
“The short-termism of the measure will come back to haunt Lebanon,” the group wrote. “Once [the central bank] BDL runs out of dollars and is no longer able to artificially support a low rate, and in the continued absence of confidence in the system, the Lebanese pound will possibly witness an even greater devaluation, with devastating consequences on citizens.”