BEIRUT: The dollar exchange rate continued to decline on Saturday in the Lebanese black market, recording a record £27,650 against the dollar, losing £11,000 in less than 18 hours.
The fall was a way to quell public anger and pacify the markets, days before the newly elected parliament on Tuesday elected the speaker, deputy speaker and parliamentary committees.
The Lebanese National Bloc said parliament speaker Nabih Beri was focused on renewing his term, while the country was calling it “a major collapse” and warning of an imminent collapse of health sector hospitals.
Despite opposition from Christian parties and opposition parliamentary blocs, Berry is expected to win re-election for a sixth time.
Berry should have received around 60 votes from members of his faction, Hezbollah’s representative and members of his allies, a far cry from the 98 votes he had received in the previous parliament.
A political observer said the post of deputy speaker, which is reserved for a conservative deputy, was almost reserved for Ilyas Bou Saab, MP from the Free Patriotic Movement bloc, although the bloc chose to vote for Berry as speaker. refused.
The dollar exchange rate exceeded 38,000 pounds on Friday, causing unprecedented chaos in all regions and sparking outrage.
Central bank governor Riyad Salameh announced on Friday that the dollar rate is beginning to fall sharply enough that individuals and institutions are able to buy dollars from banks at the bullion rate on a daily basis.
There was chaos in the trading markets on Saturday. Some stores stopped selling goods as they waited to see if the dollar rate would stabilize early next week.
An employee of a private company said he changed his LBP salary when the dollar rate was at its peak on Friday, fearing it could be worth more if he kept the amount in Lebanese pounds.
However, a significant drop in the exchange rate of 10,000 Lebanese pounds on Friday night shook him, as the value of his salary had dropped significantly.
Finance Minister Yusuf Khalil estimated the volume of black market exchange at $5 million a day.
He added that the trading volume on the Sarafa platform exceeds millions of dollars per day.
“This means that uncontrolled increases in the dollar rate are not normal, which supports the hypothesis that some people will create this exchange rate differential and that political and commercial reasons are attributable to high black market exchange rates or markets. responsible for creating panic.
Economic expert Walid Abu Sliman said the central bank was intervening in the market to absorb the money supply in the Lebanese pound to prevent speculation and reduce margins in the financial market – namely the Sarafa platform – where rates was over 12,000 Lebanese pounds.
The process may be temporary, and contribute to a reduction in the dollar rate, he said, but added: “What matters is stability.”
Abu Sleiman said that “speculation is not combated through these processes, but through a central platform that limits trading to buying and selling.”
The central bank governor has asked banks to keep their branches and funds open till 6 pm for three consecutive days from Monday to meet citizens’ requests to buy dollars at the bullion price.
The Lebanese National Bloc reported that the governor’s circular was “postponing the eruption for a few days.”
Block believes that “aside from taking the necessary decisions to unify the exchange rate and strengthen administrative and judicial oversight, the collapse scenario if the reforms needed to restructure the credit and banking sector were implemented.” could have been avoided.”
The bloc also believed it would have been avoided if Prime Minister Najib Mikati’s cabinet had not waited until its final session to propose its financial rescue plan in an attempt to sideline the people and the international community. When, throughout its mandate, it was busy defending. Cartels and Bankers.
“The solution is to elect Parliament bodies and committees within the next week and initiate electoral consultations to form a rescue government that does not adopt communal allocation,” it said.
It called for a unified plan to implement the financial reforms requested by the IMF and strengthen the economy.