Lebanese banks set rate of 3,000 LL /$ for withdrawals from dollar accounts

BEIRUT, April 27 (Reuters) – Lebanese banks have set an exchange rate of 3,000 pounds per dollar for withdrawals from U.S. dollar accounts for this week, two banking sources said on Monday – around 50% weaker than the currency’s official pegged value. 

The central bank last week said depositors with dollar accounts in Lebanon would be paid cash in the local currency at a “market rate” within each bank’s withdrawal limits. 

It was one of several recent moves away from the official pegged rate of 1,507.5 pounds to the dollar that has been in place since 1997 and is still used for vital imports. 

The pound has slumped since October as Lebanon has sunk deeper into a financial crisis that has hiked prices, fuelled unrest and locked depositors out of their U.S. dollar savings. 

In a circular late on Sunday, the central bank said foreign exchange dealers could not sell U.S. dollars for more than 3,200 Lebanese pounds. The currency weakened close to 4,000 pounds to the dollar last week in the parallel market. 

“Starting tomorrow (Tuesday) every day it will be at 3,200 until further notice,” the central bank source told Reuters. 

Separately, the central bank has set an exchange rate of 3,800 pounds per dollar to be applied at money transfer firms on Monday, a central bank source said. 

Lebanon’s financial and banking crisis is widely considered to be the biggest risk to its stability since the 1975-90 civil war, undermining faith in the economy and the dollar peg. 

Money transfer offices, used by many Lebanese abroad to send money to relatives at home, had previously dispensed transfers in dollars but hard currency has grown scarce since the crisis began. 

4 Exchange rates

Lebanon now has 4 official exchange rates

1507.5 LL to the dollar for wheat, fuel and medicine imports

3000 LL to the dollar for withdrawals from dollar accounts in Lebanon

3200 LL to the dollar max rate money changers can sell the dollar for

3800 LL to the dollar is the rate for new. money wired through transfer firms such as Western Union

REUTERS