A money exchange vendor counts US dollar banknotes at his shop in Beirut, Lebanon Jan. 19, 2023. (Credit: Mohamed Azakir/Reuters)
BEIRUT — Hours after reaching a new record low on the parallel market Friday morning, at more than LL63,000 to the dollar, the Lebanese lira abruptly retreated to LL57,000 by end of afternoon.
According to the tracking website Lirarate.org the dollar was buying at LL56,500 and selling at LL56,000 shortly after 6 p.m. At 9 a.m. Friday, it was buying at LL63,500 and selling at LL63,300 on the same platform.
The gap between this rate and that of the Sayrafa platform (LL38,000 since last Tuesday), designed by Banque du Liban to try stabilizing the exchange rate, is therefore back at around LL18,500.
On Thursday, the national currency reached the LL60,000 mark against the greenback, before continuing to tumble during the day.
In response to this freefall and its consequences — namely a steep rise in bread and fuel prices — sporadic demonstrations have broken out in recent days in the country.
Demonstrators on Friday burned tires to block the highway between Baalbeck and Riyaq in the Bekaa Valley, L'Orient Today's correspondent in the area reported.
Some experts say it is possible the dollar will double in value against the lira by the end of the year if the status quo continues.
“The recent depreciation of the lira is linked to the lack of confidence amid a presidential vacuum and in the absence of a fully-fledged cabinet, while reforms are at a standstill, which jeopardizes a potential final agreement with the International Monetary Fund,” Marwan Barakat, head of research at Bank Audi told L’Orient-Le Jour earlier this week. Lebanon is awaiting a potential IMF assistance package pending a set of required monetary reforms.
Barakat also mentioned the “spillover effect” caused by the anticipation that starting Feb. 1 the exchange rate set by BDL for the withdrawal of dollars blocked in the commercial banks via its circulars No. 151 and No. 158 will increase to LL15,000. This measure was announced in November and confirmed last week. The withdrawal rate presently stands at LL8,000.
In more than three years of economic crisis, Lebanon's national currency has lost more than 97 percent of its value. Meanwhile, without a president or fully empowered cabinet, the Lebanese authorities continue to stall in adopting the reforms needed to halt the country's economic and financial collapse.