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bankingApril 21, 2022

LBP exchange rate declines to 26,500 on black market

The Lebanese currency on Thursday declined on the black market, with a rate exceeding 26,000 against the dollar.

It dropped to a rate of 26,500 as the country prepares for its parliamentary elections in May.

The LBP had been relatively stable until last month after an unprecedented escalation in judicial measures against local banks, as Mount Lebanon Prosecutor Judge Ghada Aoun froze the assets of five of Lebanon’s largest banks.

In January, a central bank circular that allowed banks to buy dollar banknotes from the BDL had led to a major recovery of the Lebanese lira value as it strengthened to around 20,000 after it had reached a low of 34,000.

Lebanon is in the grip of a devastating economic crisis that has been described as one of the worst in modern history. It imports most of its wheat and has faced shortages over the past weeks as the war in Ukraine leads to increases in prices of oil and food products around the world.

The adoption of a capital control law is one of the reforms requested by the International Monetary Fund to financially help crisis-hit Lebanon.

The joint parliamentary committees refused Wednesday to discuss the capital control draft law before looking into a clear recovery plan, while Prime Minister Najib Miqati repeatedly defended the law, assuring that the government is keen on protecting the depositors' rights.