The sums injected into the currency market Friday has been much higher than the weekly average prior to Dec. 16 (Photo AFP)
BEIRUT — Trading volume on the Sayrafa platform reached $41.5 million Friday, at a rate of LL24,400 per dollar, Banque du Liban announced in a statement.
Here’s what we know:
• The amount of dollars injected into the currency market Friday is much higher than the weekly average prior to Dec. 16, the day the Circular was released.
• Data shows that, prior to Dec. 16, the 5-day average stood at $9.4 million and this number has gradually increased to currently stand at $24 million. This indicates the central bank’s increased intervention.
• As the day progressed, it was clear that banks were offering aggressive terms for their clients to exchange their lira banknotes for US dollars. Some banks, for example, went as far as proposing that their clients convert up to 100 million in lira into US dollars at the Sayrafa rate, while others were requiring clients to leave up to 20 percent of the total amount in a term deposit in lira for between two to three months.
• On the back of these developments, the Lebanese lira sharply gained on the parallel market, appreciating by more than LL4,000 against the US Dollar, from LL31,700 to LL27,500 to the US dollar.
• Central bank Governor Riad Salameh later said that the objective behind these operations is to reduce exchange rate volatility and to defend the lira.
• The lira had reached a low of more than LL33,000 to the dollar earlier this week, prompting the central bank to remove the quotas on US dollar purchases by banks.
• The larger amounts reported also indicate the success of the central bank’s strategy to force all related entities to record all currency transactions in US dollars on the Sayrafa platform, making it the reference benchmark.