Lebanese Banks Just Increased USD Exchange Rate For Trapped Savings

LebNet

The exchange rate for trapped dollar savings in banks has reportedly increased from 3,000 to 3,850 Lebanese pounds, according to AFP, local news reported.

Since April, people with USD accounts were allowed to withdraw their trapped dollars (aka “lollars”) but only in the Lebanese pounds at the market rate set by the central bank, which was less than the black market rate.

In order to encourage people to withdraw their dollars, some banks in Lebanon slightly increased their exchange rate. Yet, people would still lose around 50% of their money’s worth.

The Lebanese pound has plunged to a new low reaching 8,000 L.L/$ on the black market. Meanwhile, the dollar is pegged at 1,507.5 L.L for necessary imports such as diesel, flour, and oil.

The local currency continues to freefall. Meanwhile, the potential for the $10 billion IMF bailout is nowhere in sight, as the IMF managing director Kristalina Georgieva has said, “We do not yet have reason to say there is a breakthrough.”

In addition, “a senior member of Lebanon’s finance ministry who is part of a government team negotiating with the International Monetary Fund resigned Monday over the mishandling of the country’s economic crisis,” according to France 24.

Following on the footsteps of Henri Chaoul, who lost hope of any “genuine will” of the government to implement the necessary reforms, the director-general of the finance minister, Alain Bifani, just quit.

He is the second member of the team negotiating with the IMF to quit in despair at the government’s alleged unwillingness to implement reforms.

As for the Lebanese banks’ new rate, according to Reuters, “a banking official said several banks started adopting the 3,850 rate this week and others would soon follow” although “there was no official announcement from Lebanon’s banking association.”