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Lebanon: Money transfers close as currency goes into freefall

Lebanese protesters gather in front of the central bank building in Beirut amid an economic crisis on 23 April 2020 [ANWAR AMRO/AFP/ Getty Images]
Lebanese protesters gather in front of the central bank building in Beirut amid an economic crisis on 23 April 2020 [ANWAR AMRO/AFP/ Getty Images]

Dozens of demonstrators broke coronavirus lockdown orders last night to protest in front of the Lebanese Central Bank in Beirut, after the country's currency, the Lira, went into freefall.

Officially, the Lira-Dollar exchange rate is still pegged at 1,507.5 Lira to the US dollar. Yesterday, however, the exchange rate at some shops shot up to over 3,600 Lira to $1, reaching an all-time high.

Rate monitoring site lebaneselira.org noted that there was "no clear Lebanese Lira exchange rate due to extreme market volatility resulting from [Central Bank] recent circulars that significantly reduced US dollars in circulation in Lebanon."

Crowds had lined up in front of money transfer offices earlier in the day, attempting to withdraw dollars, the last day before the Central Bank circular requiring all transfers to be withdrawn in Lebanese Lira, rather than dollars, regardless of the currency sent, came into effect.

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Until now, new money sent from outside Lebanon could be withdrawn in dollars. From today, all transfers must be withdrawn in the local currency at the "market rate" according to the circular.

The "market rate" will be determined by banks themselves, with depositors with dollar accounts in Lebanese banks receiving local currency, within the organisation's withdrawal limits, at this rate.

Coronavirus is affecting the world's economy - Cartoon [Sabaaneh/MiddleEastMonitor]

Coronavirus is affecting the world's economy – Cartoon [Sabaaneh/MiddleEastMonitor]

The decision not to allow money transfers to be withdrawn in dollars sparked a rush on some money transfer offices yesterday. Video's surfaced on social media showing crowds of Lebanese flouting lockdown orders outside Western Union and Money Gram offices, attempting to receive foreign transfers in dollars.

Protests began at noon across the Lebanese capital over the dire economic and living conditions. Demonstrators were heard chanting "we don't care about corona, Riad Salameh is corona", according to a report from Al Arabiya.

READ: UN calls for restraint on Lebanon-Israel border

Riad Salameh is the governor of Lebanon's Central Bank – a position which he has held since 1993 – and has come under fire for his handling of the economic situation.

The government has also faced criticism for failing to stem the collapse of the Lira or alleviate the economic stresses caused by the pandemic-related lockdown.

cash assistance program, which promised a one-time handout of 400,000 lira (approximately $130) for the most in need, has never materialised, leaving hundreds of thousands to go hungry.

One activist taking part in last night's protests told Al Arabiya, "we realise we're living in the time of a coronavirus pandemic, but hunger is way worse than coronavirus".

READ: Lebanon legalises cannabis cultivation

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