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Banque du Liban issued a new circular elaborating on an earlier statement about dollar withdrawals. Circular 161 states that holders of the so-called “Lebanese dollars,” or “lollars,” can exchange their money with fresh dollars during the month of December at the Sayrafa rate. Under the new regulations, the central bank will supply banks with US dollar banknotes at the daily announced Sayrafa rate — which yesterday stood at LL22,300 — instead of Lebanese lira, and banks will in turn sell these dollars to their clients at the same Sayrafa rate. For example, if the withdrawal limit is $3,000 lollars, clients can take out LL24,000,000 at the LL8,000 lollar rate. But under the new circular, they can also exchange that money for dollar banknotes at the Sayrafa rate, which if it’s LL22,300, will be equivalent to $1,076 in US dollar banknotes — that is, at a haircut of 64 percent. The circular is broadly seen as the central bank’s latest trick to staunch the lira’s depreciation, but while the national currency made slight gains in the wake of the announcement, many analysts predict these will be short-lived given the narrow time period to which the latest circular applies and the lack of a comprehensive financial recovery plan.

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