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Lira rebounds after dollar sale move by Lebanese central bank

The Lebanese lira made a major recovery against the dollar on Friday, after the central bank allowed commercial banks to purchase dollars from it at the Sayrafa platform exchange rate.

The dollar was trading for LBP 27,750 on the black market around 1pm Friday, down from around LBP 31,000 the previous day.

“You feel like Riad Salameh is suddenly finding dollars in his jacket’s pocket,” a Lebanese citizen quipped on Facebook, wondering how the central bank is going to provide fresh dollars to pay the banks as per its latest circular.

A Lebanese financial expert meanwhile warned that the central bank would deplete its remaining foreign currency reserves with the measures it is taking to stabilize the lira in the absence of reforms by the political authorities.

The central bank had announced Tuesday that banks are now allowed to unlimitedly buy U.S. dollars from the central bank in Lebanese pounds at the price specified by the Sayrafa platform.

“In addition to the monthly quota that the banks are withdrawing in USD, the banks now have the right to buy dollar banknotes from the BDL with the LBP currency that they and their customers possess, without a ceiling,” the central bank said.

The BDL’s statement came after a meeting between Salameh, Prime Minister Najib Miqati and Finance Minister Youssef al-Khalil.

Source: Naharnet.com

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