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bankingMarch 24, 2021

Central Bank launches foreign exchange platform

Banks, money changers mandated to use it

The Central Bank (BDL) has issued two circulars, one authorizing banks to perform currency exchange operations based on a newly-launched money exchange platform, and the other mandating licensed money exchangers to use the platform exclusively for their operations. Both banks and money changers have until April 16 to comply with BDL’s directives.

The platform is intended to undertake all exchange operations other than the current ones regulating withdrawals of dollar deposits in lira (currently at LL3,900 per dollar).

The exchange rate is expected to hover around LL10,000, according to Minister of Finance Ghazi Wazni.

The exchange operations will be used mainly to provide dollars to traders for import operations not currently covered by BDL, which include basic goods subsidized at the exchange rate of LL1,500/USD (fuels, wheat, certain pharmaceuticals) and other imports funded at the LL3,900 rate.

Wazni said that the goal of BDL is to control supply and demand in order to curb speculation.

The platform is not expected to meet all types of demand, and therefore the parallel market is likely to remain active. This means that there would be four different exchange rates prevailing in the market.