Frustration mounting over dual exchange rates in Lebanon

Depositors had withdrawn their deposits from banks at the start of the crisis and kept them at home, says money changer. (AFP)
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Updated 21 January 2020

Frustration mounting over dual exchange rates in Lebanon

  • Anger directed at money changers as well as banks over accusations of profiteering

BEIRUT: As banks have rationed working with dollars, refrained from exchanging Lebanese pounds into the US currency and vice versa, and decreased cash flow to customers, the Lebanese money changers’ market has recovered and there are now two exchange rates for the dollar.

The first is the official rate adopted by banks, and is stable at 1,517 Lebanese pounds. The second is controlled by supply and demand, and has led the dollar to reach 2,500 Lebanese pounds due to lack of optimism over the country’s ability to overcome the economic and political crisis it has been facing for more than three months.

“Some people are exchanging money without a license. They collect capital from each other, trade in dollars and collect daily profits of up to 1 million Lebanese pounds,” Mahmoud Murad, head of the Syndicate of Money Changers, told Arab News.

“I’ve submitted a complaint against those 20 days ago to the Central Bank and the judiciary. I’m waiting for the investigation’s results. Those people … must be prosecuted and referred to the anti-money laundering department.”

Some money changers told Arab News off the record that large quantities of money are being shipped unlawfully to Lebanon on board private planes.

“Licensed money changers have no limit in regards to bringing foreign currencies into the country,” said Murad.

“The Central Bank obliged us to present detailed reports on all our operations every Monday and Tuesday, particularly in light of accusations that money changers raise the dollar exchange rate at the beginning of the week and lower it by the end of the week to make profits by controlling the price of the dollar,” he added.

“Depositors had withdrawn their deposits from banks at the start of the crisis and kept them at home. The Central Bank estimated them at $3 billion,” Murad said.

“They resort to transferring them to the Lebanese pound according to the market price. We shouldn’t be accused of controlling the dollar’s price.”

Popular anger has been directed at money changers as well as banks. “The Syndicate of Money Changers asked caretaker Interior Minister Raya Al-Hassan to provide money changers with security personnel to protect them just like the banks, but she said there’s a shortage of personnel,” said Murad.

“We’re having to resort to private security agencies. We have the right to carry a licensed weapon, but doing that might implicate changers in crimes.”
 


Libya’s NOC says production to rise as it seeks to revive oil industry

Updated 22 September 2020

Libya’s NOC says production to rise as it seeks to revive oil industry

  • Libya produced around 1.2 million bpd – over 1 percent of global production – before the blockade
  • Libya’s return to the oil market is sustainable

LONDON: Libya’s National Oil Company said it expected oil production to rise to 260,000 barrels per day (bpd) next week, as the OPEC member looks to revive its oil industry, crippled by a blockade since January.
Oil prices fell around 5 percent on Monday, partly due to the potential return of Libyan barrels to a market that’s already grappling with the prospect of collapsing demand from rising coronavirus cases.
Libya produced around 1.2 million bpd — over 1 percent of global production — before the blockade, which slashed the OPEC member’s output to around 100,000 bpd.
NOC, in a statement late on Monday, said it is preparing to resume exports from “secure ports” with oil tankers expected to begin arriving from Wednesday to load crude in storage over the next 72 hours.
As an initial step, exports are set to resume from the Marsa El Hariga and Brega oil terminals, it said.
The Marlin Shikoku tanker is making its way to Hariga where it is expected to load a cargo for trader Unipec, according to shipping data and traders.
Eastern Libyan commander Khalifa Haftar said last week his forces would lift their eight-month blockade of oil exports.
NOC insists it will only resume oil operations at facilities devoid of military presence.
Nearly a decade after rebel fighters backed by NATO air strikes overthrew dictator Muammar Qaddafi, Libya remains in chaos, with no central government.
The unrest has battered its oil industry, slashing production capacity down from 1.6 million bpd.
Goldman Sachs said Libya’s return should not derail the oil market’s recovery, with an upside risk to production likely to be offset by higher compliance with production cuts from other OPEC members.
“We see both logistical and political risks to a fast and sustainable increase in production,” the bank said. It expects a 400,000 bpd increase in Libyan production by December.
The Organization of the Petroleum Exporting Countries and allies led by Russia, are closely watching the Libya situation, waiting to see if this time Libya’s return to the oil market is sustainable, sources told Reuters.