Wassim Al-Zuhairi - Beirut

The Lebanese financial markets are in a state of instability, as evidenced by the significant increase in the exchange rate of the US dollar in the parallel market against the Lebanese pound.

While the dollar exchange rate touched the barrier of four thousand Lebanese pounds at the cashiers, the official exchange rate approved by the Central Bank remained at the limits of 1515 pounds. Not all efforts to curb this surge in the exchange rate of the dollar were unsuccessful.

In front of this reality, and in light of the banks ’failure to grant depositors their money in foreign currency, and the scarcity of the dollar in the markets, the Governor of the Central Bank, Riyad Salama, issued a series of regulatory circulars that allow depositors to make monthly withdrawals of five thousand dollars of their deposits in foreign currencies, provided that commercial banks pay the value in Lebanese pounds According to the market price.

This was preceded by a circular that allowed small depositors to collect their deposits under the ceiling of $ 3000 in Lebanese pounds and at the exchange rate of the market. 

Criticism
These circulars were resented by citizens, especially on social media, where a number of them considered that they constitute a deduction from their savings, and that their aim is to protect the capital of banks and large depositors from any direct deduction from their deposits, or impose an upward tax on wealth.

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In response to the Central Bank circulars and the financial, economic and living conditions, some protests have witnessed movement movements and road closures, and sit-ins have been carried out in front of Banque du Liban in Beirut and the regions.

However, the fiercest criticism against the governor of the Central Bank of Lebanon came from Prime Minister Hassan Diab, who said that the deterioration of the exchange rate of the lira is accelerating suspiciously, considering that there is a dilemma represented by a suspicious ambiguity in the performance of the governor of the bank regarding this deterioration.

Diab added that the accumulated losses in the Bank of Lebanon reached 7 billion dollars since the beginning of this year, pointing to the exit of 5.7 billion dollars from bank deposits during the last January and February, and stressed that the government will not tolerate the suppression of all tampering with financial stability.

The journalist specializing in economic affairs, Mahasin Mursal, sees that what gets out of the dollar’s ​​exchange rate is an attempt to get people used to liberalizing the exchange rate, and she said that the aim of the bank’s governor’s circulars is to make depositors ’money in the Lebanese currency, which is a deduction from these funds, as she put it.

Mahasin expects that these generalizations will exacerbate the damages, because they absorb dollars from the markets directly or indirectly, and she said that safety decisions were not considered and proved their negatives, whether on the local market or the citizens through high inflation and lack of purchasing value, calling for the necessity of stopping the banking operations to curb the rise dollar price.

Purchasing power
On the other hand, the consultant in one of the Lebanese banks, Nassib Ghobril, said that the circular of the central bank allows depositors to take advantage of their deposits in foreign currency and at the exchange rate in the current market.

And he considered that the aim of the generalization is to preserve the purchasing power of citizens in light of the high cost, and to support the conditions of people in the current difficult circumstances.

A number of regions of Lebanon witnessed popular movements due to the deterioration of the price of the lira and the high prices (Al-Jazeera)

Gabriel pointed out that all the circulars issued by the Central Bank since last year are temporary and not a final solution, indicating that their goal is to fill the vacuum left by the executive branch because of its delay in finding a radical treatment of the liquidity and confidence crises in the local economy.

He said that the first steps for a solution are to start negotiations with the International Monetary Fund on financing and reforms, considering that the presence of multiple exchange rates for the US dollar is harmful to the Lebanese economy.