Lebanon’s embattled central bank has announced it will slash the value of the Lebanese pound to 38,000 per US dollar on its Sayrafa trading platform after the local currency fell to record lows on the parallel market.
The Sayrafa platform is one of several exchange rates in Lebanon, which is grappling with one of the worst economic crises in modern history. The Sayrafa rate stood at 31,200 on December 23, the last day of trading before the Christmas break.
Lebanon’s official rate is 1,500 pounds per dollar, a value that is meaningless amid a more than 95 per cent fall since the financial collapse that first became apparent in 2019.
The parallel and most used rate has been well over 47,000 pounds to the dollar in recent days, which the Banque Du Liban blamed on currency speculation and the smuggling of US dollars outside Lebanon.
“This rise caused inflation in the markets, which harmed the Lebanese citizen, since prices in Lebanon are linked to the exchange rate of the dollar,” the BDL said.
After the central bank announcement on Tuesday, the dollar was trading at about 43,000 Lebanese pounds.
The BDL said it was also opening currency trading at the new rate to all individuals and institutions, and removing a $400 monthly limit.
The Sayrafa app was introduced last year in a bid to limit the power of black market exchanges.
The economic crisis has pushed many in Lebanon into poverty, with severe shortages of basic essentials including clean water, electricity and medicines.
A political vacuum has delayed the implementation of desperately needed reforms so Lebanon can receive billions in dollars of bailout money from the International Monetary Fund.
Lebanon has been without a president since Michel Aoun departed office at the end of October, while Prime Minister Najib Miktati's caretaker cabinet has been stripped of most of its powers.
As the head of the Banque Du Liban since 1993, Mr Salameh is seen by many as a key figure in the country's financial downturn.