Lebanon’s central bank is set to launch an electronic foreign currency trading platform to try and stabilize the exchange rate of the US dollar to the Lebanese pound. The platform will help monitor transactions and will allow banks to buy and sell fresh dollars at 3850-3900, but I don’t see how banks will sell at this rate given that the market rate is 3 times as much. Exchange shops must also buy and sell foreign currencies at the rate specified by the central bank, which cannot happen right now. The only way for this to potentially work is for BDL to increase the rate.

Last year, BDL attempted to launch the platform “Sayrafa” but it failed and the Lira kept devaluating, and given that we have less dollars at the central bank, in banks and in the several markets we now have, this platform is only delaying the inevitable. The only positive aspect is that we might no longer see unjustified drops like the one that happened in the last three days where the Lira jumped from 10,000LL to 15,000LL.

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