Lebanese pound slides further despite new pricing system

Lebanon’s currency has slid further against the U.S. dollar despite the new pricing system aimed at controlling the price increase on food and the negotiation deal with International Monetary Fund for bail out from crisis.

Over 60% value of Lebanese pounds has plunged into loss since October while the U.S. dollars dwindled, making banks cut access to hard currency and ration the greenback exclusively for fuel, medicine, and wheat fixed at 1,507.5 pounds.

The currency crisis started frrom late last year and is said to have been the biggest threat to the country’s stability since the civil war of 1975-1990.

A currency dealer on Wednesday June 10, 2020, said that one dollar was exchanged for 4,250 Lebanese pounds and sold at 4,500 pounds.

The importers too shared their experience of increasing difficulty to access enough dollars to complete orders.

The government and money changers last week launched a pricing system with a gradually reduced rate announced each day to reach 3,200 pounds.

The pricing system on Wednesday was pegged at 3,890 for buying and 3,940 for selling. However, importers said the dollars at this rate were unavailable.

“We have given clear, decisive instructions to security agencies to be tougher in curbing the chaos in pricing,” Prime Minister Hassan Diab said on Wednesday.

The Lebanon’s central bank has recently introduced a new electronic foreign exchange trading platform.

The new platform enables money changers to enter the transaction details into an application for general coordination by the central bank.

Lebanon’s dollar supply has been further frustrated by the currency crisis in the neighbouring Syria.

The depreciation in the currency partly led to demonstrations by protesters on Tuesday in Beirut and Tripoli.

Local broadcasters said Lebanon’s government has appointed 4 central bank vice governors on Wednesday. The appointment is coming after the posts had been left vacant for over a year.