Crazy dollar race in the indifference of politicians!

Crazy dollar race in the indifference of politicians!
Crazy dollar race in the indifference of politicians!

We no longer count the sad records that the dollar rate beats on the parallel market in the general indifference of the authorities. According to the online platform Lirarate.com, the greenback was bought at the end of the day on Tuesday at 54,400 LL and sold at 54,300 LL.

The Lebanese watch with concern the free fall of the Lebanese pound, which nothing seems to be able to stop, while the political leaders remain carefully focused on their interests and their political squabbles. For the champions of the blockade who care little about seeing the Lebanese sink into crisis, it matters little that the dollar continues its mad course, as long as their power is not shaken and they keep their hands high in the showdown between them and their political adversaries.

The dollar’s exchange rate continues to rise and the Lebanese pound broke yet another depreciation record on Tuesday, exceeding the bar of 55,100 LL for one dollar in general political indifference. Politicians are busy waging three-franc six-penny squabbles instead of enacting the reforms needed to stem the country’s economic and financial collapse. Now, 85% of the Lebanese population lives below the poverty line and the Lebanese pound has lost 97% of its value since the start of the crisis in October 2019.

Platforms in perpetual activity

Weekends, holidays, night and day: the course of the exchange rate of the dollar against the Lebanese pound never stops. All stock exchanges in the world, such as New York, London or Hong Kong, have closing and opening hours or non-working days, except the exchange rate platforms for the dollar in Lebanon. It was at 9 p.m. on Tuesday that the dollar reached the bar of 55,100 LL, following a dazzling upward curve.

For the economist Fouad Zmokhol, dean of the faculty of management and management of the USJ, it is the purse of the mafias. “It’s an exchange rate that isn’t one, it’s a rate that is in dark hands belonging to parties,” he protests. “Is it normal that after three years there is no name, no company behind these apps that give the dollar exchange rate? Or even worse, that we have absolutely no information on the technical functioning of these applications?” asks M.Zmokhol.

All these applications and these formulas are unfortunately completely erroneous, confides the economist to Here Beirut. For him, today we are witnessing a duel between the Banque du Liban (BDL) which is trying to pull, in order to be master of the game, with its economic weapon which is the Sayrafa platform and the parallel market, which wants to manage the market its own way by widening the gap between the Sayrafa platform rate and the black market rate as much as possible to generate profits”.

Indeed, the difference between the rate of the parallel market and that of the Sayrafa platform (38,000 LL on Tuesday), created by the Banque du Liban to try to stabilize the exchange rate, continues to increase and rises now at around 16,000 LL. So for one hundred dollars the gain is 1,600,000 LL.

No limits

It is now clear that it is difficult to determine exactly the factors that push the pound to plunge at this rate, due to the opacity of the free market. What is clear, however, is that few data suggest a reversal, ie a decline in the dollar. The demand for greenbacks is still strong in Lebanon.

How high can the exchange rate continue to climb? “Unfortunately, there is no limit,” says Zmokhol. He also recalls that during the war in Lebanon, the rate of the dollar went from three pounds to 3,200 LL, i.e. 1,000 times more, whereas “we are still only at 36 times (from 1,500 LL to 54,000 LL)”. For him, the solution is to dollarize the economy 100%.

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