The Banque du Liban published circular 161 indicating that it will provide foreign currencies to local banks on the basis of the rate of its Sayrafa electronic platform, which will then have to provide it in full to their customers in dollars and not in Lebanese pounds according to the conditions of use of this platform.
As a reminder, the Banque du Liban announced that it had taken a series of measures aimed at reducing the Lebanese pound money supply and injecting foreign currencies following the sudden deterioration in the parity of the Lebanese pound against the dollar on the black market. This deterioration itself followed the decision of the governor of the Banque du Liban to raise the parity rate of circular 151 allowing the withdrawal of funds deposited in dollar accounts or other foreign currencies, from 3,900 LL / USD to 8,000. LL / USD. Observers believed that this decision increased the money supply and therefore reduced the value of the Lebanese pound.
The governor of the Bank of Lebanon is trying to control the money supply today, while the parity of the Lebanese pound now fluctuates between 26,000 LL / USD and 29,000 LL / USD, its historic low.
Text of the circular
The Governor of the Bank of Lebanon, on the basis of the Law on Currency and Credit, in particular article 70 and article 83 (paragraph B), which allows the Bank of Lebanon to buy and sell directly foreign currency in exceptional cases and in agreement with the Minister of Public Finance, in order to preserve the public interest in the current exceptional circumstances currently facing the country, and on the basis of the approval of the Minister of Finance on 14 / 12/2021, and on the basis of the decision of the Board of the Banque du Liban taken at its meeting held on 12/15/2021,
it is decided as follows:
Article 1: An exception to any regulatory text issued by the Banque du Liban The Banque du Liban makes available to the banks American dollars in cash on the basis of the daily announced exchange rate for the Lebanese pound against the American dollar for the operations of trading carried out on the “Sayrafa” electronic foreign exchange trading platform the day before, within the limit of the remaining amount of the ceiling set for each bank for the current month.
Article 2: Banks must pay all the sums referred to in article 1 above, in American dollars, to their customers at the aforementioned rate, instead of paying the sums which belong to them in Lebanese pounds and resulting from withdrawals or transactions of cash funds from accounts or contributions belonging to them, within the limits approved for the execution of such transactions with the bank concerned.
Article three: If the customer wishes the opposite of what is indicated in the second article above, he must send a written request to this effect to the bank concerned.
Fourth Article: This decision is effective until 12/31/2021.