Central Bank imposed capital control on transfers overseas, reduced cash withdrawals and vehemently disregarded a “haircut” on deposits that would reduce many Lebanese citizens’ savings.
TROUBLING FACTS: The Change Rate of about 3,000 LEB to One Dollar has been recently adopted by Byblos Bank, sources said. As Depositors were no longer able to withdraw any amount of their savings in dollar, Byblos Bank’s customers are now paid 3,000 LEB to one dollar!
The fact that Byblos Bank is buying the dollar for 3,000 LEB creates a lot of speculations! The currency’s devaluation will eventually stop. What would be the change rate? 3,000 or 5,000 or more to one dollar?
What’s currently occurring is far more dangerous than a haircut!
This unsettling incidence compounds the economic shutdown and substantially destroy any hope-fostering actions to restore the economy and strengthen the monetary system. In other words, the dollar-related savings and wages in Lebanese pound are cut by half.
The people became thoroughly demoralized by the crumbled economy, the devaluated currency, the dollar-based rentals, the dollar-charged public or private services, and the soaring cost of living.
Salameh has repeatedly overstated the strength and stability of the monetary system in Lebanon despite the compelling evidence of a dire economic situation and financial instability that overwhelmed the low-and-high-income workers across Lebanon.
The seventy-year-old Riad Salameh, CBL’s governor since 1993, said to a Reuter’s reporter last year that the Lebanese pound (Lira) is strong. Later that year, he doubled down on his remarks. In an interview with Bloomberg TV in Beirut that took place on August 30, 2019, Governor Riad Salameh said that “Banque du Liban [CBL] remains committed to preserving the Lebanese pound’s peg [change rate] of about 1,507.5 to the dollar, in place for more than two decades, and has “ample” cash to do so.”
The reality is quit the opposite! The Lebanese pound’s peg in the black market topped 4,500 pounds to the dollar in recent days. Salameh deceptively claimed “He has ample cash to do so” — to preserve the change rate of about 1507.50 to the dollar in place for two decades.
We are witnessing unprecedented times; the financial crises are ramping up exponentially. And the worse is yet to come!
But at the end of the tunnel… could we see a glimmer of hope?