The “Central” intervenes again to curb the collapse … and Salama pledges to “suck liquidity.”
“No comment” is the comprehensive answer of the real makers of the money markets in Lebanon, including bankers and money changers, with the aim of verifying the background of the sharp fluctuations that occurred in monetary exchanges, which led to the dollar approaching the barrier of 150,000 pounds, before it retreated yesterday afternoon (Tuesday), Then the Central Bank of Lebanon rectified it with a new version of intervention, offering open sale at a price of 90 thousand pounds per dollar through its “exchange” platform, which led to a decline in the exchange rate on the black market to 105 thousand pounds in the afternoon.
Perhaps the most exciting thing is what a senior banker noticed, in contact with Asharq Al-Awsat, of an actual and exceptional revolution in the exchange markets, as the phone applications run by “ghosts” of decision-makers turned to assume the role of the pivotal player in pricing the exchange of the lira, and not being satisfied with what It was used as a mirror reflecting only the prices in circulation with most exchange companies and currency dealers based on the course of supply and demand operations and their sizes.
In a reaction that reproduced previous experiences, the Central Bank of Lebanon took the initiative to announce its intervention again in the currency market, offering the open sale of cash dollars at a price of 90,000 pounds immediately through the “exchange” platform, indicating that its decision was approved by Prime Minister Najib Mikati and Minister of Finance Youssef Khalil, and aims To limit the collapse of the lira in parallel markets and to preserve the value of deposits in local dollars. In light of the banks’ strike, he offered to provide exchange with the “first class” (A) money changers, along with the banks that are not committed to the strike.
Indeed, this intervention, in its updated version, produced an immediate calm, which ensured the reduction of the dollar trading price in the parallel markets from its highest record levels, which amounted to about 145 thousand pounds, to between 105 and 110 thousand pounds in the afternoon. While it is expected that the banks will join the “investment” of the technical measure, with the decision to suspend their strike and provide the possibility for their customers to conduct exchange operations at the announced price. In parallel, fuel prices fell by about 350,000 pounds at once for the gasoline plate, which reached the level of two million pounds, after it almost approached the threshold of 3 million pounds, according to the price that the station owners were expecting before the intervention of the “Central”.
The Governor of the Banque du Liban, Riad Salameh, said, “The decision that we took today came to withdraw all Lebanese pounds from the market, and the Banque du Liban has the ability to do so,” explaining that the method of buying dollars against the pound is done through “licensed first-class money changers that the Central Bank deals with.” According to a statement issued by the Banque du Liban, Salameh affirmed his insistence on implementing this decision, “in the interest of the citizens’ purchasing power.”
In terms of numbers, the volume of the monetary mass liberated in lira is approximately 70 trillion, which theoretically means, according to the banker’s estimates, that its complete drying requires pumping about 770 million dollars, but the central bank is able to disburse less than half of these amounts to isolate or “suction” the hot amounts that Being used in speculations on the national currency. This is what actually paves the way for the transition to the stage of restructuring and unifying exchange rates within a system based on objective determinants that ensure the centralization of the role of the monetary authority in liquidity management.
The banker emphasized that invoking the cover of political differences regarding the tasks of the caretaker government and its powers in light of the presidential vacuum does not apply at all to the catastrophic events that the national currency exchange rate is witnessing in irregular monetary exchanges, whether in terms of the size of the collapses achieved, or in terms of structural change in the methodology of the markets. Based on the principle of “supply and demand”. This applies automatically and at the same rates of collapse to living capacities, incomes, and the remaining savings in the banking system, and then to the overall economic and social conditions that are mainly saturated with incentives for turmoil and chaos.
It is not equal, according to the banker’s reading, that the exchange rate of the lira changes at an unprecedented pace in its speed and margins over a period of hours only, to rise by the difference to about 25 thousand pounds against the dollar, while the “coma” of the strengthened government continues in the absence of legislative initiatives, perpetuating the decline of the state’s presence with its existing powers to The lowest limits, while it is exclusively concerned with declaring a state of economic emergency immediately and taking all possible deterrent measures to limit the catastrophic incursion of comprehensive collapses.
And the banker confirms that “the new intervention decided by the central bank will result in a temporary calm that gives the executive authority (not long) time to try to limit the dangerous deviations that control the monetary scene,” as it should work quickly to support technical measures with procedural steps that begin with addressing the causes of the general strike that continued. Banks implemented it as an objection to the “arbitrariness” that persecutes their departments and institutions by some judicial authorities, and then get out of the state of “denial” by reactivating efforts to approve legislation governing liquidity management and financial operations in accordance with the requirements of the monetary crisis that has been exacerbating without deterrence since the fall of 2019.
And in the series of related repercussions, the head of the Administration and Justice Committee, Representative George Adwan, revealed, “All the deputies who attended the committee session yesterday wished that the Speaker of Parliament (Nabih Berri) would be contacted, to request that the session of the joint committees shift tomorrow (today) to offer immediate treatment and keep up with For what is happening, and for that reason the request of the Prime Minister, the Governor of the Banque du Liban, the Minister of Finance and the Association of Banks to come to Parliament so that the joint committees can ask them and demand immediate treatment, and communication has been made with the Speaker of the Council who was in favor of the proposal. Adwan announced that the session of the parliamentary committees will turn to the accountability of the government, the Bank of Lebanon and the banks, and an explanation of what they are doing in light of the current collapse? And asking them to take immediate measures for treatment.