Dollar exchange rate continues to rise as banks go on strike

The Lebanese pound continues its downward spiral as the dollar exchange rate surpasses 90,000 Lebanese pounds.

This marks a return to pre-announcement levels by the Central Bank of Lebanon, in which it sold dollars at 70,000 Lebanese pounds through the Sayrafa platform.

The latest round of bank withdrawals on the Sayrafa platform has been lackluster due to low public enthusiasm, as many feared that their money would be locked in the bank as it happened earlier this year. However, the situation has been further complicated by the decision of the banks to go on open strike next Tuesday.

Sources within the Central Bank of Lebanon have confirmed that the bank will not intervene in the exchange rate through banks during the strike and will not accept new requests for exchange through Sayrafa. 

It will only distribute funds to those who submitted requests last week through Sayrafa. The Sayrafa platform will remain open only for public-sector employee withdrawals.

During the bank strike, the availability of dollars through banks will cease, leading traders, importers, and anyone needing dollars to resort to the black market, increasing the pressure on the dollar even more.

While the central bank's aim through Sayrafa is to alleviate the deterioration of the exchange rate, Sayrafa doe not address the fundamental reason for the devaluation: the high and ongoing state budget deficit that the Central Bank of Lebanon is forced to finance by printing Lebanese pounds. 

As long as there is no plan or reforms, the dollar exchange rate will continue to rise, with or without banks.