Salameh Says 'No Parallel Market' for Dollars in Lebanon
Central Bank Governor Riad Salameh reassured Monday that there is no “parallel market” for U.S. dollars in Lebanon.
“Banque du Liban is continuously supplying the Lebanese markets with dollars for steady prices,” said Salameh in remarks to the second UAE-Lebanon Investment Forum in Abu Dhabi.
Commenting on the latest dollar shortage crisis in the Lebanese markets, the governor admitted that “it’s true that we have recently witnessed some kind of circumvention of the dollar to Lebanese lira exchange rates and a dollar shortage problem at money exchange shops.”
“But in Lebanon, the money exchange operations are a trade in currency notes, and under the Lebanese law, money changers do not have the right to carry out semi-banking transactions, nor to work for a third party,” Salameh added.
“This is an important point, because thanks to it, we cannot say that there is a parallel market for the dollar in Lebanon, as has been recently said, unless banks start announcing prices higher than those endorsed by the central bank,” he said.
Salameh also noted that over the past 12 months, deposits in Lebanese banks were “stable.”
“We did not witness a growth of these deposits, but we also did not witness a drop,” he pointed out.
On Tuesday, the central bank said it will facilitate access to dollars for importers of petroleum products, wheat and medicine. Banks and money exchange shops last month started rationing dollar sales in the country, where Lebanese pounds and U.S. dollars are used interchangeably in everyday transactions.
Petrol station owners had staged a strike over a lack of dollars at a fixed exchange rate to pay for imports, while flour producers complained they had to resort to much higher rates from money changers.
Lebanon has had a fixed exchange rate of around 1,500 Lebanese pounds to the dollar in place since 1997.
Lebanon's public debt stands at around $86 billion -- more than 150 percent of gross domestic product (GDP) -- according to the finance ministry.
Eighty percent of that debt is owed to Lebanon's central bank and local banks.
In July, parliament passed an austerity budget as part of conditions to unlock $11 billion in aid pledged at a conference in Paris last year.
Source: Naharnet
| Copyright © 2012 Naharnet.com. All Rights Reserved. | https://www.naharnet.com/stories/en/265296 |