The value of Lebanon’s currency has been dwindling in the past few months, hitting a 2700LL per dollar peak some time ago. In response, the Central Bank issued a circular to cap the value of the dollar at 30% of the official value.
However, many exchange houses did not comply with the circular and the Lebanese government is now seeking to crack down on unlicensed exchange houses.
Head of the exchange houses Mahmoud Mrad told The Daily Star: “We had a meeting today [Tuesday] with Central Bank Gov. Riad Salameh and State Financial Prosecutor Ali Ibrahim at BDL’s headquarters. Ibrahim promised us to hold a top security meeting Thursday to review measures to shut down all the unlicensed exchange dealers in Lebanon.”
According to Mrad, there are only 305 licensed exchange houses operating in the country while there are around 400 unlicensed exchange houses. He lamented that those dealers are “selling the dollar above LL2,500 and sometimes more.”
The government is taking measures to ensure that no one from the exchange houses would be selling dollars at above the recommended price of the circular.
However, exchange houses are refusing to sell dollars at the new rate. Some of them refuse to sell dollars at all because their supply of dollars is running low.
While it is commendable that the government is taking action to ensure that the Lebanese currency doesn’t suffer further devaluation, there is something worrying about the number of unlicensed exchange houses that have continued to operate in the country over the years.
The fact that these exchange houses have been able to operate for a very long time only for the government to start regulating them now in the midst of an unprecedented economic crisis is very troubling.
It is intriguing that these unlicensed exchange houses have been able to stay in business for the time that they have.