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Depositors had withdrawn their deposits from banks at the start of the crisis and kept them at home, says money changer.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“Depositors had withdrawn their deposits from banks at the start of the crisis and kept them at home.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.”
 


Turkish lira slides to record low of 8 against dollar

Updated 26 October 2020

Turkish lira slides to record low of 8 against dollar

  • The lira has lost 26 percent of its value against the dollar since the start of the year
  • The Turkish currency also recorded its lowest level against the euro, trading near 9.52

ANKARA: Turkey’s lira on Monday set a new record low against the US dollar after the central bank refused to raise its main interest rate and tensions increased sharply with the country’s Western allies.
The lira was at 8.03 against the dollar at around 0730 GMT, suffering a loss of nearly one percent since the start of the day.
The Turkish currency also recorded its lowest level against the euro, trading near 9.52.
The lira has lost 26 percent of its value against the dollar since the start of the year.
Turkey’s central bank last week upset the markets which had expected a 175 basis points hike to the one-week repo rate.
The bank opted instead to keep the rate unchanged at 10.25 percent despite market concerns over persistently high inflation, which remains in double-digits, and worries about a sharp drop in foreign currency reserves.
Consumer price inflation was 11.75 percent in September.
The bank’s governor will deliver the quarterly inflation report on Wednesday in Istanbul.
The lira’s decline comes at a time of strained relations with NATO allies including France, Greece and the United States over multiple issues.
Turkish President Recep Tayyip Erdogan angered Paris after he said his French counterpart Emmanuel Macron needed to have “mental checks” at the weekend.
France responded by recalling its ambassador to Ankara and on Saturday described Erdogan’s comments as “unacceptable.”