Lebanon’s Central Bank Governor Denies Intention To Convert USD Deposits Into Lebanese Pounds

BEIRUT, Lebanon’s Central Bank Governor, Riad Salameh, denied his reported intention to convert U.S. dollar deposits in Lebanese banks into Lebanese pounds, Banque Du Liban said, in a statement.

The statement comes after Salameh said that banks in Lebanon, legally have the right to pay people’s money in Lebanese pounds, which sparked anger among the Lebanese.

The governor’s remarks prompted Lebanese to voice their fears, about the governor’s intention to convert U.S. dollar deposits into Lebanese pounds, at the regular official price of 1,507.5 Lebanese pounds, while the price of one U.S. dollar in the Lebanese market is currently valued at around 2,400 Lebanese pounds.

The governor said, his remarks meant that he does not object to banks’ payments in U.S. dollar to their clients, but banks have the right to pay people’s deposits in Lebanese pounds.

Lebanon witnessed in the past few months, a shortage in the U.S. dollar, caused by economic slowdown and the drop in cash injections from Lebanese abroad, reducing the central bank’s foreign currency reserves and leading to a shortage in dollar for businesses and individuals.

Hence banks put restrictions on withdrawals of depositors and their transfers from Lebanese pounds to U.S. dollars, creating panic among depositors, who resorted to withdrawing their money and storing them in their houses.

The high demand on U.S. currency created a parallel market, where the dollar is sold at a remarkably higher price, incurring problems for importers, mainly those who need the foreign currency to import their needs.

Source: Nam News Network

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