Lebanese pound stable, trading at LL7,700 on black market

Black market exchangers were selling the dollar for around LL7,750 and buying it for LL7,650

  
A woman counts Lebanese pound and U.S. dollar banknotes at a currency exchange shop in Beirut, Lebanon April 3, 2020. Image used for illustrative purpose.

A woman counts Lebanese pound and U.S. dollar banknotes at a currency exchange shop in Beirut, Lebanon April 3, 2020. Image used for illustrative purpose.

REUTERS/Mohamed Azakir

BEIRUT: The Lebanese pound remained stable against the dollar Friday, continuing to trade at around LL7,700 on the black market.

Black market exchangers were selling the dollar for around LL7,750 and buying it for LL7,650. The dollar traded for around LL7,700 Thursday and LL7,550 Wednesday.

Licensed exchangers were selling the dollar for LL3,900 and buying it for LL3,850, a rate set by the Central Bank that has remained unchanged for months.

The Central Bank has been subsidizing essential goods such as wheat, fuel and medicine for more than 20 years at the official peg of LL1,507.5 to the dollar, however with a dollar liquidity crunch plaguing the country and little inflow of foreign currency, it is not possible anymore.

The bank's foreign currency reserves stood at $19.8 billion at the end of August, of which $17.5 billion are required reserves that cannot be used, meaning that the bank can only use $2.3 billion that will last the country another three months, a source told The Daily Star last month.

Prices of basic commodities in Lebanon could soar as high as 400 percent if authorities fail to find an alternative strategy once the Central Bank ends its subsidies program in November, economists and consumer protection groups have warned.

With a caretaker government in place, the already frozen negotiations with the International Monetary Fund cannot be resumed until a new Cabinet is formed, a process that has been deadlocked with political parties feuding over different demands.

Lebanon hopes to receive an injection of around $10 billion from the IMF to jump-start its collapsing economy, and if the new government enacts long-overdue reforms, the $11 billion pledged at the 2018 CEDRE donor conference in Paris could also be unlocked, with French President Emmanuel Macron spearheading another aid conference for Lebanon before the end of the year.

Copyright © 2020, The Daily Star. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Currencies