The troubled Lebanese pound continued its decline to a new low against the US dollar despite the implementation of a new pricing system that Beirut hopes will succeed in curbing the rise in food prices while negotiating with the International Monetary Fund about an agreement that will take it out of the crisis.
The lira has lost more than 60 percent of its value since October due to the erosion of dollar stocks, which prompted banks to limit depositors' access to hard currency and allocate dollars exclusively to buying fuel, medicine and wheat at an exchange rate of 1507.5 pounds against the dollar.
A currency trader said that the dollar was bought on Wednesday for 4,250 pounds and sold for 4,500. A second trader said he was buying the dollar at 4,300 pounds compared to 4,100 yesterday, but he was not selling because of tight supply.
Importers said that raising enough dollars to complete orders even at higher exchange rates is becoming increasingly difficult.
"Looking at the future for only a few weeks, we may not be able to fulfill our obligations to our suppliers," said Hani Bahsali, general manager of Bahsali Foods, one of the major food importers.
Last week, the government and money changers launched a unified pricing system that includes an exchange rate that is gradually reduced and announced on a daily basis, aiming to reach the level of 3,200 liras.
Within the framework of this plan, the money changers set the purchase price on Wednesday at 3,890 pounds and the sale price at 3,940 pounds. The central bank said that traders who fail to comply will be punished. Importers said that dollars at this price are not available.
The Central Bank of Lebanon said today that a new electronic platform for exchange operations will start operating on June 23 as part of other efforts to stabilize the currency.
Under the new platform, currency exchanges will be required to enter details of transactions via an electronic application and commit to a scope for sale and purchase to be determined every morning by the central bank and subject to adjustment during the day.
Dollar supplies in Lebanon were further affected by a currency crisis in neighboring Syria. Syrians are scrambling to buy the dollar to protect themselves in the face of inflation and hedging in the face of imminent US sanctions.