Lebanese lira bounces back as regulator improves Sayrafa exchange rate

The local currency, also called the pound, earlier hit yet another record low to the US dollar on the parallel market

Lebanon's currency has sharply depreciated on the parallel market since the 2019 economic collapse. AP
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The Lebanese pound bounced back on Wednesday night on the parallel market after the central bank said it would begin selling US dollars in cash at the improved rate of 70,000 pounds on its Sayrafa trading platform from March 2.

The announcement by central bank Governor Riad Salameh came as the parallel market exchange rate for the local currency hit yet another all-time low of 90,000 to the US dollar on Wednesday.

But after the move by the much-criticised Banque Du Liban, the local currency quickly recovered to about 79,000 to the dollar in less than an hour on the parallel market.

The central bank has undertaken similar moves previously to stem the collapse of the local currency, although such measures have previously only worked temporarily to slow the plummet.

The Sayrafa rate on Tuesday was 45,400 to the dollar. Wednesday's announcement means the platform now prices the dollar at more than four times the official government exchange rate.

That had been changed to 15,000 pounds to the dollar on February 1, the first time the local currency had been devalued in decades. It had been pegged at about 1,500 to the dollar for 25 years.

That value became meaningless as the pound plunged against the dollar on the parallel market, which is the most used rate.

The Sayrafa platform was introduced in 2021 to try to limit the power of black market exchanges.

Unifying the country's several exchange rates is one of several steps demanded by the International Monetary Fund for Lebanon to unlock a $3 billion bailout package.

But the IMF has been deeply critical of Lebanon's slow progress in reaching its demands.

Lebanon's economic crisis, which became apparent in 2019, has seen the local currency lose more than 97 per cent of its value on the parallel market.

Inflation has soared while salaries have failed to keep pace, with much of the population now in poverty.

Updated: March 01, 2023, 10:03 PM