Lebanon c.bank aims to provide dollars for imports, lower food prices

A woman counts US dollar banknotes as Lebanese pounds are pictured in the background at a currency exchange shop in Beirut, Lebanon. (Reuters)

The Lebanese central bank aims to provide dollars for imports at an exchange rate of 3,200 Lebanese pounds to reduce food prices, it said on Friday, in an effort to rein in spiraling inflation as the local currency collapses.

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Dollars are currently changing hands on a parallel market at more than 4,000 pounds. The Lebanese pound has lost more than 60 percent of its value since October, when the country's long-brewing economic troubles grew into a major financial and banking crisis.

The central bank is already providing dollars for imports of wheat, fuel and medicine at a rate of 1,507.5 pounds - an official peg that has remained in place even as the pound has slumped on the parallel market.

Read also: Lebanon ready to float currency once aid is secured, Minister says

“Banque du Liban will continue to inject dollar banknotes that it acquires via the banks with the aim of financing imports at the price of 3,200 Lebanese pounds per US dollar with the aim of reducing the price of food products,” the central bank said in a statement.

A government plan for getting Lebanon out of the crisis is based on a shift to a flexible exchange rate, although only in the “coming period” - and the currency peg will be maintained for now, Finance Minister Ghazi Wazni said last week.

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Last Update: Friday, 15 May 2020 KSA 17:42 - GMT 14:42
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