Lebanon witnesses monetary chaos with multiple dollar exchange rates

News Bulletin Reports
2023-01-15 | 10:59
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Lebanon witnesses monetary chaos with multiple dollar exchange rates
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Lebanon witnesses monetary chaos with multiple dollar exchange rates

In Lebanon, the world champion in economy and finances, the dollar exchange rate fluctuates during the weekend and at night, and instead of one exchange rate, we have a cocktail.

 

First, the old official exchange rate of 1,500 LBP, which we miss for its good days, and only those with good luck can repay their old loan at this price.

 

Second, there is the soaring black market parallel rate, which is close to 50,000 LBP, and it may be higher according to the mood of every merchant or shop owner.

 

Third, Lebanon has the Sayrafa platform exchange rate of 38,000 at the moment; you can withdraw from the banks on its basis, but the platform operates for a few hours, according to the available liquidity and the mood of the banks.

 

Fourth, there is a rate for money transfer companies between the Sayrafa and the black marker rate, which is approximately 42,000 LBP.

 

Fifth, the budget is set at a different rate; governmental fees and taxes are set at 15,000 LBP to the dollar according to the budget.

 

Moreover, there are the rates set in two different circulars issued by BDL.

 

Circular No 151. allowing citizens to withdraw dollars at a rate of 8,000 LBP to the dollar, and Circular No. 158 enables clients to withdraw at a rate of 12,000 LBP.

 

And then, there is the electricity exchange rate, which requires citizens to be knowledgeable in mathematics. BDL sets the EDL exchange rate at the Sayrafa platform rate with an additional 20 percent. (45,600 LBP).

 

And if you pass the above mathematical test, you will know how to calculate the price difference between the fresh dollar and the Lollar ($ in old bank accounts) and the difference between the cash Lira and the Bira (LBP in old bank accounts).

 

Why not unify all these prices at one price and prevent this chaos in the market?

 

Sources say that Banque du Liban, at present, cannot set a unified price for the dollar.

 

As long as there are no radical reforms and no agreement with the International Monetary Fund, it will be able to restore confidence in the country, along with liquidity and investments.

 

Without that, Lebanon will continue to live with a scarcity of dollars, and the demand for it will continue to rise. Its price will increase, creating a dangerous wave of high prices, inflation, and a social disaster.

 

The sources add that the ball today is in the politicians' court to start with electing a president and forming a government capable of putting the country on the right track, curbing the exchange rate, and unifying it.

 

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