Will the Lebanese citizens wake up one day in early 2022 to find out that the official exchange rate for the dollar rose from 1,507 to 6,000 LBP?
All indications so far show that this course is serious, and that the Central Bank Governor Riad Salameh, may take this step in the first months of the new year. But the rate 6,000 LBP will be subject to the developments of the government and negotiations with the International Monetary Fund (IMF). Therefore, this rate would exceed 6,000 reaching 8,000 LBP, which is third the price of Sayrafa platform, and the figure is close to the exchange rate 12,000 LBP for the circular 158.
But how will the new official rate be calculated?
On October 17, 2019, the size of the money supply in local currency, according to Central Bank figures, was 13.5 trillion Lebanese pounds, at a time the official exchange rate was 1.507 LBP per dollar.
Today, the money supply reached 54 trillion LBP, which means that it quadrupled, and accordingly, the exchange rate should quadruple reaching 6,000 LBP.
Banking sources reveal that this decision does not meet the IMF’s demand to unify the exchange rate, but it brings dollar prices closer together.
The sources say that Salameh paved the way for such an expected decision by issuing Circular 161 which talked about giving employees their salaries in dollars instead of the lira, and according to the platform’s exchange rate. This circular is considered a turning point towards removing the dollar peg, which has prevailed since 1997, and amounts to 1,507 pounds to the dollar.
The question that arises: Will any decision early this year exclude dollar loans provided by banks, specifically housing loans, which amount to about $15 billion?
It is worth noting that raising the price of the dollar officially will inevitably raise the prices of about 90% of food commodities, including cars, Internet, especially since customs duties and value-added tax will be calculated according to the new official figure.
Let’s wait for the year 2022 and happy new year.