The Banque du Liban headquarters in Beirut. (Credit: João Sousa/L'Orient Today)
BEIRUT — Banque du Liban announced on Monday that it extended Circular 161, a measure meant to narrow the gap between the parallel market exchange rate and that of the central bank’s Sayrafa rate, until the end of September, as the bank’s grip on the national currency further slips away.
Here’s what we know:
• BDL originally issued the circular on Dec. 16, allowing banks to sell dollars to depositors at the Sayrafa exchange rate, and has been repeatedly renewed by the central bank since.
• Overall, the advantages of Circular 161 were fewer than expected. The fast falling lira breached LL31,000 to the US dollar on the parallel market on Aug. 20, compared with the central bank’s reduced Sayrafa rate, which was trading at LL27,200 to the US dollar as of Friday.
• The lira’s further collapse comes amid ongoing pressure on the Lebanese economy. A series of promised reforms attached to April’s International Monetary Fund agreement continue to stall. So far, out of several laws required to unlock the $3 billion assistance package, only the bank secrecy law has been approved by Parliament, in its late July session.
