The central bank of Lebanon will begin selling unlimited amounts of U.S. dollars in a bid to halt the spiralling devaluation of the Lebanese pound, Governor Riad Salameh said on Tuesday.
Salameh set a new rate for Sayrafa, the central bank's exchange platform, at 90,000 Lebanese pounds per dollar on Tuesday. He set the rate at 70,000 on March 1 but it has steadily crept up, trading at 83,500 on the platform on Monday.
The Lebanese pound was weakened from 121,000 to 140,000 on Tuesday morning to 140,000 by the afternoon, prompting residents to seal off roads in anger over their declining purchasing power.
Since the economy began unravelling in 2019, the pound has lost 98% of its value. The central bank has officially revalued the pound from 1,507 to 1.507. In February, the US dollar was 5 to 15,000 but it has traded at a much lower and varying rate on Sayrafa.
The move came with the approval of the caretaker premier and caretaker finance minister and aimed to limit the devaluation of the Lebanese pound in the parallel market, Salameh said.
He said that those willing to trade could use Grade A exchange houses or banks that lift their strike. The banks of Lebanese resumed a strike last week to protest the legal measures taken against them.
After the decision was made, the pound started to rise in value on the parallel market.
The International Monetary Fund in Lebanon wants to clinch a $3 billion aid package that would help it emerge from the meltdown, one of several steps sought by the International Monetary Fund for Lebanon.
Residents are still dealing with a confusing array of exchange rates as Lebanon approaches the one-year mark since it signed a preliminary deal with the IMF.
In February, Salameh said Lebanon still had $10 billion in foreign currency reserves. When the crisis began, the country had more than $30 billion in FX reserves.