BEIRUT: The dollar exchange rate in the Lebanese black market dropped slightly to LL8,800 partly due to the scarcity of pound banknotes in this market, the head of the Syndicate of Money Changers said.

The rate of the dollar against the Lebanese pound had retreated moderately Tuesday to LL8,850, a day after Banque Du Liban outlined a plan to subsidize the cost of importing food.

Mahmoud Halawi told The Daily Star that some unlicensed traders were facing a severe shortage of the pound banknotes and for this reason these traders could not meet the demand of their customers to sell their dollars.

He added that Banque Du Liban has apparently reduced the injection of the pound banknotes to the lenders in a bid to curb the conversion of these notes to dollar bills in the black market.

I dont know exactly the extent of this shortage in the pound but it appears to be designed to reduce the demand for the dollar banknotes in the black market, Halawi explained.

He did not dismiss the possibility that the importers are now refraining from buying dollars in the black market in order to give BDL time to implement its circular which would allow these suppliers to buy dollars at the rate of LL3,900.

The Central Bank said Monday that it will provide foreign currencies to Lebanese banks to finance the import of basic food items at an exchange rate of LL3,900 against the dollar.

All import applications submitted prior to this date will be approved according to Intermediate Circular No. 557 dated May 27, 2020, on the basis of a fixed exchange rate LL3,200 for the dollar.

The official price of the dollar remains at LL1,515 according to the statement.

Importers of 280 food products will be able to purchase dollars at the rate of LL3,900 via banks.

It is hoped that the plan will reduce demand for dollars on the black market by providing food importers with an alternative cheaper supply of greenback.

Halawi stressed the importance of implementing BDLs circular in order to drastically contain the activities of the unlicensed traders.

If the importers managed to buy dollars from BDL through commercial banks at a rate of LL3,900 then the rates in the black market will definitely drop further, he added.

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