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The surge in demand for Lebanese pounds persists, especially following the election of General Joseph Aoun as President of the Republic. Despite speculators’ attempts to mislead the public about an improvement in the pound’s value and a decline in the dollar’s, the exchange rate remains stable.
For some time now, rumors have suggested a drop in the exchange rate from 89,500 pounds per dollar to 50,000. However, Nassib Ghobril, Chief Economist at Byblos Bank, dismisses such claims as “not serious.” “The Lebanese pound has experienced a frenzied demand since the ceasefire and Thursday’s presidential election. Speculators started selling dollars to buy pounds, believing the exchange rate would change, aiming to make a profit or at least avoid losing value,” he explained to This Is Beirut.
The Banque du Liban (BDL) continues to adhere to its monetary policy, tightly controlling the exchange rate and curbing speculative activities. According to Ghobril, Central Bank will not adjust the exchange rate without a comprehensive reform plan. He emphasized that “these rumors are baseless and illogical,” adding that “the financial institution has maintained exchange rate stability since July 2023.” He pointed out that all commercial transactions, corporate and banking balance sheets, and Treasury revenues are calculated at this rate, warning that any change would have a negative impact. He also noted that this stability has allowed the Treasury to boost its revenues.
Ghobril called it unrealistic to believe that “the exchange rate will drop to 50,000 Lebanese pounds just because the Lebanese Parliament successfully elected a President of the Republic.”
He also referred to the BDL’s planned launch of a platform in collaboration with Bloomberg in December 2023, designed to allow supply and demand to dictate the exchange rate. However, this project was postponed due to the war that broke out on October 8, 2023, as such a platform requires a climate of trust and stability.
The economist affirmed that the BDL would likely maintain the exchange rate at 89,500 pounds per dollar until a new government is formed and a comprehensive reform plan is set up. He also clarified that no decision has been made to lower the exchange rate, even after the presidential election.
Furthermore, Ghobril highlighted that this surge in demand for Lebanese pounds benefits the BDL, enabling it to purchase dollars from the market and increase its foreign currency reserves.
In this context, and according to some reports, it seems the BDL’s reserves have increased by $120 million over the past two days.
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