BEIRUT: The dollar exchange rate on Lebanon’s black market was expected to continue its fall in the wake of measures announced by central bank Gov. Riad Salameh on Friday, a senior banker told Arab News.
The banker expects the exchange rate to drop further until it is almost equal to the exchange rate on the central bank’s Sayrafa platform, which on Friday recorded a price of 24,600 pounds against the dollar.
The banker’s comment came as the governor issued a surprise statement late on Friday asking banks to keep their branches and funds open until 6 p.m. for three consecutive days from next Monday in order to meet citizens’ requests to buy dollars at the Sayrafa price.
He also issued instructions to pay the salaries of public sector employees in dollars at the Sayrafa rate.
The depreciation of the local currency has created a ripple effect, creating even more economic difficulty for the country, and the central bank had previously asked banks to give part of their dues in dollars at the Sayrafa exchange rate.
However, banks began to limit the amount of dollars given to people, leading to a black market revival in the past week.
The governor’s statement on Friday shook the black market, which brought the dollar exchange rate on Friday to 38,000 pounds.
Confusion mounted in the exchange shops immediately after the governor’s statement, as people rushed to exchange the US currency, with the dollar’s exchange rate dramatically slipping within a few minutes from 37,700 pounds to 29,000 pounds.
Black-market money changers, who are spread out in the main streets of Beirut, especially in the gold markets and near money exchange shops, were stunned and started making calls.
Banking expert Louis Hobeika told Arab News: “What is happening is the result of people’s fear. The problem in Lebanon is not monetary, but rather economic and political.”
He added: “Within a week, the dollar exchange rate rose about 11,000 pounds, but the dramatic drop in the price in less than an hour is certainly for political reasons.”
Hobeika said that the central bank appears to have been subjected to political pressure to force it to do something to reduce the rate, amid fears of social upheaval.
The bank governor resorted to the latest statement, he said. “But it’s like treating a cancer patient with Panadol.”