The market rate will be set by the bank in question on a daily basis, the circular says.
by Georgi Azar -Source: Annahar
A file photo of Lebanon’s central bank (AP)
BEIRUT: Lebanon’s central bank issued a circular Tuesday allowing the withdrawal of dollar deposits in LBP at “market rate”.
The market rate will be set individually by every bank on a daily basis, the circular says.
Lebanon is grappling with its most severe economic crisis in decades, with depositors faced with unprecedented de-facto capital controls.
Unemployment has jumped to record highs while the national currency slipped to record lows, a 60 percent devaluation of the pound on its official exchange rate of LBP 1,507.5 to the dollar.
Exchange shops were selling the dollar for LBP at 3,200 and buying it for LBP 3,125 in Beirut Tuesday morning.
The decision comes at the heels of the central bank allowing small depositors to withdraw their savings at “market rate” as well.
Depositors with $,3000 or less and LBP 5,000,000 or less make up 60 percent of all accounts.
They will be paid out in Lebanese pounds at the wish of the depositor, based on the given day’s rate. The central bank is yet to launch a “foreign exchange unit” to centralize the price of dollars for money changers.
Account-holders of LBP 5,000,000 or less will have the option to convert their savings into USD at the official rate and then withdraw them in LBP at market rate.
This will be done after netting out all loans, the central bank said. In other words, an account would only be eligible if the balance is LBP 5,000,000 or less after deducting all loans.