It is noteworthy that the Central Bank Governor Riad Salameh, previously confirmed that “the last circular, which is 161, aims to reduce the volume of banknotes in Lebanese pounds in circulation, and the process of reducing banknotes will be between the Central Bank and commercial banks.”
Sources explained earlier this significant drop in dollar, that “after the dollar’s exchange rate in the parallel market reached about 34,000 LBP, it returned and retreated to less than 29,000 LBP after the issuance of Circular 161 and its amendments, whereby any citizen can convert his “lira” into “dollar,” according to Sayrafa platform, and attributed the reasons to the following:
First: Reducing the exchange rate of the dollar in the parallel market, and this is what is happening today as a result of supply and demand.
Second: Collecting the Lebanese currency available in homes and in the hands of citizens is to “reduce” inflation and the proportion of the monetary mass in Lebanese pounds, after it reached record levels.
Third: Reconsidering the role of the Central Bank in controlling the exchange rate of the dollar after this role declined in the recent period as a result of speculations and the central bank’s focus on supporting commodities, fuels and medicines, while the main point was the dollar and its control because it constitutes the starting point for other price controls.
Finally, “Circular 161 will not be able to curb the dollar exchange rate if it is not accompanied by the return of the Council of Ministers to the meeting, and the launch of the recovery plan, which includes implementing the promised reforms and restoring confidence in the Lebanese banking sector.”
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