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LIRA RATE

Lira plummets after banks curtail sale of dollars at Sayrafa rate

Lira plummets after banks curtail sale of dollars at Sayrafa rate

(Credit: AFP)

BEIRUT — The Lebanese lira on Wednesday depreciated rapidly, hitting LL24,000 to the US dollar on the parallel market, after a number of commercial banks stopped selling US dollars at the central bank’s Sayrafa rate.

Here is what we know:

    • Several banks stopped selling US dollars at the Sayrafa rate after they lowered their clients’ daily quotas. This development led to the sharp drop in the lira — around 12 percent in a couple of hours.

    • Banking sources told L’Orient Today that yesterday one of the largest banks saw its daily quota get depleted in the first hours of the day, after some heavy buying of US dollars by clients. This forced the bank to review and lower the quota it allocated to every client. The bank has not resumed selling US dollars to its clients.

    • The above development led to clients seeking other banks for their US dollar purchases, leading to panic buying and pushing the parallel market rate higher in expectation that the central bank will put an end to Circular 161.

    • Some banks also informed their corporate clients that buying US dollars at the Sayrafa rate is no longer possible.

    • Sources also told L’Orient Today that recently the lira check to lira cash discount has widened as much as 20 percent, this means someone selling a LL100 million lira check would get LL80 million. The lira cash amassed would be later used to purchase US dollars, but the source explained that “for someone to accept such a discount — 20 percent — means he is in a hurry and he is betting the lira will depreciate by a larger percentage against the US dollar.”

    • On Wednesday afternoon, Banque du Liban issued a statement saying that the central bank is still selling US dollars in unlimited quantities to the banks. BDL reiterated that it will continue to provide dollars "without a ceiling" through its currency exchange platform, Sayrafa.

    • Deputy Prime Minister Saade Chami told the audience gathered at a conference organized by the Social and Economic Council on Wednesday that the financial sector losses have exceeded the government's original estimate and they forecast they have risen to as high as $72 billion.

BEIRUT — The Lebanese lira on Wednesday depreciated rapidly, hitting LL24,000 to the US dollar on the parallel market, after a number of commercial banks stopped selling US dollars at the central bank’s Sayrafa rate. Here is what we know:    • Several banks stopped selling US dollars at the Sayrafa rate after they lowered their clients’ daily quotas. This development led to the...