BDL headquarters in Beirut. (Credit: Joao Sousa / L'Orient Today)
BEIRUT — Banque du Liban (BDL) on Wednesday decided to extend its main Circular No. 161 through the end of March, in an effort to mitigate dramatic fluctuations in the lira's parallel market value.
Circular No. 161 allows depositors to withdraw US dollars from their Lebanese lira accounts at the central bank's Sayrafa exchange rate. March will mark the 14th month of the measure's extension.
The main effect of this circular has been to limit Lebanese banks' customers' access to their foreign currency accounts, contributing to an increased demand for dollars and fueling the depreciation of the lira.
Circular No. 161 was adopted at the end of December 2021. It allows banks to provide cash dollars to their customers by letting customers convert Lebanese lira at BDL's Sayrafa platform exchange rate — that is, LL44,300 to the dollar, according to the latest update Tuesday.
The dollars exchanged under Circular No. 161 are provided directly to banks by BDL at the Sayrafa rate and are drawn from the country's foreign exchange reserves, which have dwindled since the beginning of the crisis in 2019.