E 7. La Banque du Liban (BDL) has just extended for the seventh consecutive time the effects of main circular no.161, which authorizes banks to provide cash dollars to their customers by converting them from their accounts into pounds at the rate of its platform. Sayrafa exchange. As always, the extension was formalized with an intermediate circular (no. 635) of 27 July, the day on which the last meeting of the central council of the institution was held. The text is available on the Bdl website, as well as three other circulars which came into force on the same day.
Once again the BDL did not modify the terms of Circular no. 161, whose mechanism is open to private individuals in the public and private sector – which earned him the title of “election gift” a few months later. legislative elections of 15 May. The dollars exchanged are supplied directly to the banks by BDL, at the Sayrafa rate. They come from the country’s foreign exchange reserves – which reach 11.8 billion dollars, according to the latest figures released by the media by Governor Riad Salamé.
We recall that the Bdl extended Circular no. 161 from one month to five times since its publication in mid-December, before granting a two-month extension in one fell swoop at the end of May. The device is part of the various adjustments to restrictions on depositors’ access to their foreign currency funds that banks have imposed unilaterally and without legal cover. And this, from the beginning of the economic and financial crisis that erupted in the autumn of 2019 and continues to this day, plunging GDP, the value of the currency and inflation to levels still unimaginable for many Lebanese three years ago.
Banks have imposed these restrictions because they are facing what some bankers call a liquidity crisis, while other observers – including Pierre Duquesne, the French diplomat in charge of coordinating international support in Lebanon – don’t hesitate to talk about a solvency crisis.
The best known mechanisms set up by the BDL alongside Circular no. 161 are: • Circular no. 150, which establishes the availability of fresh dollar accounts without time limits, and therefore indirectly recognizes the legitimacy of restrictions on bank dollars or lollars;
• circular no. 151 (withdrawal of bank dollars at the exchange rate of 8,000 pounds for one dollar) extended in June until the end of the year;
• Circular no. 158, which authorizes monthly withdrawals from restricted accounts of $ 400 in cash and the equivalent in pounds converted at the rate of 12,000 pounds for one dollar.
The Sayrafa platform rate, which is systematically lower than that of the foreign exchange market, but evolves according to the fluctuations of the national currency on the latter, was stopped on Wednesday evening at 25,600 pounds to one dollar, a stable level since last week. The exchange rate in the market is still flirting with the bar of 30,000 pounds per dollar.
The other circulars
The other three intermediate circulars endorsed Wednesday by the Bdl intervene on other levels.
636 obliges banks to provide the Banking Control Commission (CCB) with a monthly statement of the transactions carried out through Circular no. 151.
Circular no. 637 requires banks or any other company wishing to sell real estate, stock or any other interest in a company to do so in “fresh dollars”, or their sterling equivalent at the Sayrafa rate set the day before.
Finally, No. 638 authorizes banks to waive the green light of the BDL to validate requests for early repayment of certain loans (before the expiry of the loan agreement), provided that they “directly” inform the financing unit of the BDL, providing him with adequate information. A provision that concerns a whole series of special loans with certain conditions, such as subsidized loans granted by the Housing Bank, the department dedicated to military construction, the Ministry for displaced persons, the mutual investment fund for judges, the respective directorates general of the Internal Security Forces (ISF), General Security and State Security, customs, firefighters, agents of the Beirut municipality. The measure also includes loans from international educational institutions and environmental loans of less than £ 30 million.
E 7. La Banque du Liban (BDL) has just extended for the seventh consecutive time the effects of main circular no.161, which authorizes banks to provide cash dollars to their customers by converting them from their accounts into pounds at the rate of its platform. Sayrafa exchange. As always, the extension was formalized by a circular …