The central bank said last week that depositors of accounts in dollars in Lebanon would receive cash in the local currency at the “market price” stipulated within the limits approved by the bank in question.
This is one of several steps taken recently to move away from the official exchange rate pegged to the lira at 1507.5 pounds per dollar and applied since 1997, which is still used for vital imports.
The lira has fallen since October, when Lebanon slid deeper into a financial crisis, causing prices to rise and fueling instability and preventing depositors from withdrawing their savings in dollars.
In a circular issued on Sunday evening, the Central Bank of Lebanon set the maximum limit for the sale of the dollar in exchange institutions at 3,200 liras. The local currency weakened to nearly four thousand pounds per dollar last week in the parallel market.
“From tomorrow (Tuesday) daily it will be 3,200 until further notice,” a central bank source told Reuters.
Separately, a source in the Central Bank said that the Bank of Lebanon set the exchange rate of the lira at 3800 to the dollar, to be applied by the money transfer companies on Monday.
The Lebanese financial and banking crisis is widely considered to be the greatest threat to stability since the Lebanese Civil War between 1975 and 1990, which undermines confidence in the economy and the dollar peg.
Money-transfer offices, which many Lebanese use abroad to send money to their relatives in the country, previously spent dollars, but the scarcity of hard currency has grown since the crisis began.