The Lebanese exchange market witnessed sudden fluctuations over the weekend, with the US dollar surging to 99,000 Lebanese pounds before dropping back to 93,000 pounds.
This unexpected shift comes after a relatively stable period where the exchange rate hovered around LBP 91,000.
According to political analysts, the market disturbance is linked to warnings issued by speculators and money changers as the term of Lebanon’s central bank governor approaches its end later this month.
Additionally, rumors of the resignation of the four deputy governors further added to the market’s sensitivity.
However, sources close to the governors deny any current resignation plans, emphasizing their intention to engage with ministers and deputies to push for reform laws, as they reject the current financial policies.
While political factors play a significant role, there is another explanation for the recent surge in the US dollar’s rate. Analysts have attributed it to the increased money supply of the Lebanese pound in the market, exerting pressure on the dollar.
Given these circumstances, what can be expected from banks and the exchange rate?
The Sayrafa exchange platform is set to change. Sources from the Central Bank of Lebanon revealed recent meetings with the International Monetary Fund (IMF) to facilitate the fund’s communication with Reuters and Bloomberg agencies.
These meetings aim to adopt one of them to announce the exchange rate of the US dollar against the Lebanese pound, according to Sayrafa.
This initiative also involves linking Sayrafa to the global stock exchange, gradually replacing the parallel market rate, and establishing an official exchange rate.
Furthermore, this move aims to put an end to the current Sayrafa exchange formula, which has caused chaos in exchange rates and depleted the central bank’s reserves.
According to deputies of the central bank governor, unifying the exchange rate is a gateway to reform. However, it cannot be accomplished without implementing capital control law and a recovery plan.
Change is possible, but today the game lies in the hands of the political decision-makers.