BDL aims to limit LBP in circulation to curb increase in USD rate

Carrying bags of Liras with them to exchange them on the Sayrafa platform, citizens lined up in front of the banks on the first actual working day of the year to exchange Liras for dollars at 38,000 Liras to the dollar.

Two banks worked, even during the holiday, to receive money from citizens. Other banks began implementing BDL's statement on Monday, whose effects appeared to be a significant decrease in the dollar's exchange rate in the parallel market during the past few days.

Banks charge a commission ranging between 3 and 5 percent.

There is a cash bulk in Liras that BDL seeks to withdraw from the hands of the Lebanese to relieve pressure on the dollar and to maintain, even partially, a fixed price for it, but what is the size of this bulk?

Banking sources considered that BDL's move aimed at limiting the increase of the dollar exchange rate in the parallel market, controlling the general trend, and mitigating fluctuations. A source in BDL informed LBCI that the dollar price would have been higher if the BDL had not intervened before the end of 2022. 

It is also important to note that BDL is still paying some state loans and the interest on some foreign debts. Yet, its foreign currency reserves have stayed the same for four months. Therefore the goal of the above policy is to maintain as much as possible the required stability in this circumstance amid the absence of any political initiatives to resolve the crisis.