A money changer counting 100,000 Lebanese lira bills in Beirut, on Sept. 22, 2022. (Photo: Anwar Amro/AFP)
Banque du Liban (BDL, central bank) is stepping up efforts to push banks to intervene on a large scale in the foreign exchange market, providing it — exclusively — with fresh dollars. So far, this effort has yielded limited results. Banks only cover a tiny portion of BDL’s foreign currency needs; the rest comes through a mechanism built around money changers, exchange companies and money transfer companies. This circuit has allowed BDL to increase its foreign currency reserves by over $1 billion since Karim Souhaid took the helm as governor in late March — with banks contributing only about 20 percent.The remainder continues to flow through a mechanism set up during Riad Salameh’s tenure, at the height of the crisis. This system began with a single bank (Credit Bank) before being extended to a small number of institutions working with a...
Banque du Liban (BDL, central bank) is stepping up efforts to push banks to intervene on a large scale in the foreign exchange market, providing it — exclusively — with fresh dollars. So far, this effort has yielded limited results. Banks only cover a tiny portion of BDL’s foreign currency needs; the rest comes through a mechanism built around money changers, exchange companies and money transfer companies. This circuit has allowed BDL to increase its foreign currency reserves by over $1 billion since Karim Souhaid took the helm as governor in late March — with banks contributing only about 20 percent.The remainder continues to flow through a mechanism set up during Riad Salameh’s tenure, at the height of the crisis. This system began with a single bank (Credit Bank) before being extended to a small number of institutions...
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