Western Union and the other money transfer companies in Lebanon will likely revert to handing recipients their international money transfers in US dollars, a new report suggests.
For the past 4 months, money transfer companies have been forcing recipients to cash their international transfers in Lebanese pounds at a painful exchange rate of 3,850 LBP/USD.
This has been happening as the dollar’s value continues to soar against the pound, reaching, at the time of writing, around 7,700 LBP/USD on the black market; nearly twice the rate that’s still being used by these cash offices.
Naturally, considering a recipient is practically losing half of their transfer’s value as a result of the fixed exchange rate, many opted out of this wire transfer method and sought other means to cash their money in the trustworthy US currency.
With that said, according to LBCI‘s sources, the decision to have Western Union, MoneyGram, and similar companies ditch this practice and return to handing customers their money in hard currency is back on the table.
Reportedly, the central bank (Banque du Liban), which was responsible for imposing the no-dollar policy that these companies have been committed to, will soon look into the proposition, as will the competent government officials.
If approved, this decision should have a positive effect on the impoverished market and is expected to boost the Lebanese pound’s value against the foreign currency thanks to the fresh money that it allows into the country.
On the other hand, considering the central bank has reportedly been using the money transfer companies’ stored dollars as an alternative to using up its dollar reserves, this step might force the BDL to turn to these reserves to cover subsidized items and other essential expenditures.
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