Dollar crisis deepens with new exchange rate platform amidst BDL Governor's appointment

As of next week, the dollar's exchange rate will become subject to pressure and counter-pressure tactics related to the appointment of the Banque du Liban (BDL) governor.

Banking and financial sources do not rule out the possibility of using the dollar as a tool in these maneuvers, allowing the pressing party to exploit fluctuations in the exchange rate to impose their preferred method of appointment or management style for the BDL's affairs, which will remain open for discussion daily after Riad Salameh's departure.

This article is originally published in, translated from Lebanese newspaper Nidaa Al-Watan.

In the last few days, sources noticed a 50% decrease in trading on the Sayrafa platform compared to the average that prevailed since May. This is an indicator of a looming crisis, especially with the insistence of the governor's deputies on liberalizing the exchange rate on an entirely new platform.

Parliament Speaker Nabih Berri scheduled a Cabinet session for Thursday with only one item on the agenda: appointing a new governor for the BDL. This request was made on Tuesday to caretaker Prime Minister Najib Mikati, whose sources confirm that the problem lies in securing the quorum.

Government sources clarify that Berri knows that his ally, Hezbollah, does not principally agree with the appointment. Hezbollah is not inclined to upset the Free Patriotic Movement (FPM), which rejects the appointment in light of the presidential vacuum.

Nevertheless, Berri deliberately ignores this and lays blame on the Christian parties regarding the issue of the governorship, as he does in the presidential election, affirming that Mikati has candidate names, including Camille Abou Sleiman and Joseph Torbey.

Other sources reveal that Berri is exerting pressure in the days leading up to the end of Riad Salameh's term, as he fears Mansouri, the First Deputy Governor, as he placed himself outside the scenarios of accepting the application of the law, making his resignation highly likely at any given moment. He may also decline being tasked with managing the public facility, a decision that will not be influenced by the stance of the other governor's deputies. 

Two of them seem to be contemplating their resignations. At the same time, they might consider managing the affairs if they secure legal cover for state lending and reach a consensus on exchange rate liberalization.

According to insiders, Berri has been exerting pressure in the days leading up to the end of Riad Salameh's term, as he fears that Mansouri might assume the governorship in the absence of legislation protecting Berri's interests. There have even been rumors that Berri asked Mansouri to leave the country after submitting his resignation, effectively blocking any possibility of a caretaker scenario in the governorship.

Insiders also point out that appointing a new governor is a lesser concern for the Parliament Speaker. Still, it faces resistance from Christian forces, especially the FPM, which opposes any appointment amid the presidential vacuum. These sources reveal that Hezbollah conveyed to the FPM their commitment to prevent any appointment during recent talks with its leader, Gebran Bassil.

Therefore, these insiders highlight the challenges in achieving the appointment, particularly because Hezbollah does not want to disrupt its dialogue with the FPM, even if Berri is among the most vocal advocates for naming a successor to Salameh.

They note that the Cabinet, in its Thursday session, may initially propose an appointment resolution. Still, the discussion could lead to the withdrawal of the resolution and a request for MPs to manage the facility and handle its affairs in case they insist on resigning.

It is worth noting that a second meeting between them and Prime Minister Mikati is scheduled for Wednesday.