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Banque du Liban allows commercial bank depositors to withdraw from their local dollar accounts at a rate of LL 8,000 to the dollar
Commercial bank depositors with foreign currency accounts can now withdraw so-called local dollars — or “lollars” — at a rate of LL8,000 to the US dollar. Yesterday afternoon, Banque du Liban announced a new circular setting the higher rate. The lollar had been fixed at a rate of LL3,900 to the dollar since April 21, 2020. The new rate is valid until the end of June 2022, although past experience shows it could be cancelled before then or extended past that date. Under the latest circular, BDL also set a withdrawal limit of $3,000 per account per month to limit the growth in the money supply. The amount of lira in circulation has increased dramatically since the start of the financial crisis, which observers say creates inflationary pressure. The new “lollar” rate is still far below the parallel market rate for currency exchange, where one dollar was valued at more than LL25,000 as of Thursday. A withdrawal of a dollar from the bank at LL8,000, therefore, represents an effective haircut of 68 percent.