Lebanese central bank chief moves to ease US dollar crisis
Lebanon’s central bank chief moved on Monday to ease consumer demand for US dollars amid angry protests over the country’s economic plight.
Dollars will be issued to banks at the official pegged exchange rate to secure imports of petrol, medicine and flour. The move would “reduce the pressure on dollar demand at currency exchange shops,” central bank Gov. Riad Salameh said after a meeting with President Michel Aoun.
This came a day after public protests, some of which ended in riots, demanding the overthrow of the government and Aoun after two weeks of financial turbulence. Beirut was paralyzed as protesters blocked main roads with burning tires.
Bank restrictions on the issue of US dollar bills led to a rate rise in exchange shops from 1,507 Lebanese pounds to the dollar to 1,700. Many workers feared their salaries would decrease in Lebanese pounds.
“The Lebanese central bank will cover the needs of the public and private sectors in foreign currencies and will continue to do so in accordance with the fixed rates announced by the central bank, without any change,” Salameh said. Banking sources told Arab News the new measures would include “opening credits in dollars for importation, provided they are used exclusively for payment abroad, and internal operations are carried out in Lebanese pounds.”
Mustafa Alloush, a leader of the Future Movement, told Arab News: “The most important reason for what happened during the past two weeks is the shortage of hard currency, the leakage of investments, security instability, the possibility of Hezbollah causing war, and smuggling dollars from Lebanon to Syria.”