BEIRUT: The dollar exchange rate continued its fall on the black market in Lebanon on Saturday, registering 27,650 pounds against one dollar, a drop of 11,000 pounds in less than 18 hours.
The drop was a way to assuage popular anger and calm markets days before the newly elected parliament convenes on Tuesday to elect a president, vice president and parliamentary committees.
Lebanon’s National Bloc said parliament speaker Nabih Berri was focused on renewing his term as the country raced against what it called a “big meltdown” and the health sector warned of the impending collapse of hospitals.
Berri is expected to be re-elected for the sixth time, despite opposition from Christian parties and opposition parliamentary blocs.
Berri is expected to garner around 60 votes from members of his bloc, Hezbollah MPs and MPs from his allies, far less than the 98 out of 128 votes he received in the previous legislature.
A political observer said the post of vice president, which is reserved for an Orthodox lawmaker, was almost won for MK Elias Bou Saab of the Free Patriotic Movement bloc, although the bloc refuses to vote for Berri as president.
On Friday, the dollar exchange rate rose above 38,000 pounds, creating unprecedented chaos across all sectors and sparking popular anger.
The dollar rate began to fall rapidly after central bank governor Riad Salameh announced on Friday that individuals and institutions could buy dollars daily from banks at the Sayrafa rate.
Trading markets witnessed a state of shock on Saturday. Some stores have stopped selling goods as they wait to see if the dollar rate stabilizes early next week.
A private company worker said she converted her salary to LBP when the dollar was at its peak on Friday, fearing it would lose more value if she kept the sum in Lebanese pounds.
However, the sharp drop in the exchange rate of 10,000 Lebanese pounds on Friday night shocked her, as the value of her salary depreciated significantly.
Finance Minister Youssef Khalil estimated the volume of trading on the black market at $5 million a day.
The volume of transactions on the Sayrafa platform exceeds tens of millions of dollars per day, he said.
“This means that the uncontrollable increase in the dollar rate is not normal, which supports the hypothesis that some people create this exchange rate gap and are responsible for the high black market exchange rate for political reasons. and trade or to create panic in the markets.
Economic expert Walid Abou Sleiman said that the central bank intervenes in the market to absorb the money supply in Lebanese pounds in order to prevent speculation and reduce the margin in the financial market – namely the Sayrafa platform – where the rate exceeded 12,000 Lebanese pounds.
This procedure could be temporary and contribute to the lower rate of the dollar, he said, but added: “What matters is sustainability.”
Abou Sleiman said that “the fight against speculation does not go through these procedures, but through a central platform which limits the exchanges of purchases and sales”.
The central bank governor has asked banks to keep their branches and funds open until 6 p.m. for three consecutive days starting Monday to meet citizens’ demands to buy dollars at Sayrafa’s price.
The governor’s circulars delay the explosion “by a few days”, underlines the Lebanese National Bloc.
The bloc believes that “the collapse scenario could have been avoided if the necessary reforms to restructure the debt and the banking sector had been applied, in addition to taking the necessary decisions to unify the exchange rate and strengthen administrative and judicial supervision. “.
The bloc also felt it could also have been avoided if Prime Minister Najib Mikati’s cabinet had not waited until its last session to come up with its financial rescue package in an attempt to circumvent the people and the international community, as throughout his tenure, he was busy protecting cartels and bankers.
“The solution is to elect the parliamentary bodies and committees over the next week and start the electoral consultations to form a rescue government that does not adopt a sectarian allocation,” he said.
It called for the implementation of the financial reforms requested by the IMF and the development of an integrated plan to strengthen the economy.