Banks Will Now Exchange the Dollar at 2600 LL

Bloomberg | Hasan Shaaban

According to NNA, the governor of the Central Bank of Lebanon Riad Salameh announced in a series of decisions the future of the Lebanese Pound-Dollar pegging and the dollar exchange.

One of the decisions is that the exchange for the dollar will be at the market rate for small depositors. A senior banking source said that this price will be determined on a weekly basis and that this week it was decided at 2,600 LBP.

Any client with a bank account that does not exceed LBP 5,000,000 ($3000 at the official rate) will be able to withdraw, receive, or put money in bank accounts at the exchange market’s rate.

The Association of Banks in Lebanon announced earlier that the Lebanese commercial banks will work with the central bank to determine the daily exchange rate for the dollar.

According to NNA, the Association of Banks in Lebanon welcomed the decision issued by the Governor of the Banque du Liban related to exceptional procedures on cash withdrawals from small bank accounts.

Even though a similar decision was issued a month before, it was never applied and it concerned all depositors and not only small depositors.

The Association of Banks confirmed that it is pending upon the completion of the establishment and operation of the electronic trading system. These operations will determine the daily trading rates for foreign currencies.

“In the upcoming days, we will work on preparing the information systems and administrative procedures necessary for the proper implementation of these two circulars,” the Association of Banks stated.

Deposits less than $3,000 in LBP could be withdrawn at the market price, which would allow small depositors in the country to obtain their savings in cash despite severe banking restrictions.

This decision may seem like a breather for many small depositors who have been unable to withdraw money from their bank accounts. It is also a huge financial clash to those who are paid in LBP as pegging LBP 2600 to the dollar will decrease the value of the Lebanese Pound by more than 30%.