In Lebanon, a parallel and virtual foreign exchange market has emerged
To obtain hard currency and avoid being at the mercy of sometimes unscrupulous money changers, the Lebanese have created a foreign exchange market on social networks.
REUTERS / Dado Ruvic
Text by: Paul Khalifeh Follow
3 min
Since October 2019, Lebanon has been plunged into the worst economic and financial crisis in its history.
A crisis which caused, among other things, the depreciation of the Lebanese pound, which lost more than 80% of its value against the dollar, and the blocking by the banks of the savings of the customers.
Another manifestation of this crisis is the shortage of hard currencies in a highly dollarized economy.
Banks no longer provide currencies to their customers even when their accounts are in dollars or euros.
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From our correspondent in Beirut
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The official dollar rate is maintained at 1,500 pounds, but the real value of the greenback is set by the black market.
Last week it was close to 9,000 pounds.
To obtain hard currency and avoid being at the mercy of sometimes unscrupulous money changers, the Lebanese have created a foreign exchange market on social networks.
Accounts created mainly on the Telegram messaging application, considered more secure and which has many features, are intended to put buyers and sellers in contact.
The Lebanese adapt and flee the banks
The instructions are simple: subscribers set the amount they want to buy or sell, the currency of their choice, the rate they charge and the region where they are located.
The details of the transaction, that is to say the day, the hour and the place of the meeting are decided during a private conversation on the respective accounts of the interested parties.
When the deal is done, the seller must report it on the account.
This digital foreign exchange market is it marginal has become a real phenomenon that has amplified in recent weeks.
To give an example of its scope, four pages on Telegram have nearly 20,000 subscribers.
Hundreds of transactions are concluded every day.
You can exchange currencies, Lebanese pounds but also checks, which are sold or bought at a third of their value, on average.
Some accounts also offer analyzes or financial news.
Regulated practices
But isn't this parallel market helping to fuel the black market which is ultimately largely responsible for the collapse of the Lebanese pound against the dollar?
The administrators of these accounts assure that they have no commercial objective and that their main concern is to put their subscribers in contact to allow them to conclude the best deal.
In order to avoid fraud, scams and speculation, they have established what they call "golden rules": for example, any subscriber who makes more than one transaction in 7 days is banned by the managers of the page.
The person who does not respect a commitment made during a concluded transaction, such as not going to the meeting, suffers the same fate.
The administrators are particularly strict and vigilant.
The best proof that this virtual exchange market provides an answer to certain financial needs of the Lebanese: the number of subscribers to these accounts on Telegram is growing rapidly.
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