Lebanon central bank says to protect pound stability

BEIRUT: Lebanon’s central bank on Monday said it would strive to maintain the local currency’s peg to the US dollar and ease access to the greenback after weeks of mass protests.

For two decades, the Lebanese pound has been pegged to the greenback at around 1,500 pounds to the dollar, with both currencies used interchangeably in daily life.

But banks have gradually been reducing access to dollars since the end of the summer, sparking fears of devaluation as the unofficial exchange rate reached up to 1,800 pounds.

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“The central bank’s first and foremost goal is to protect the Lebanese pound’s stability,” central bank chief Riad Salameh told journalists at a press conference in the capital Beirut.

We have taken measures “to protect depositors, protect deposits”, he said.

Salameh added that he had asked local banks to lift restrictions imposed after mass protests broke out nationwide against the political class on October 17.

He said the central bank had asked banks to maintain the same ceilings on credit cards and allow customers to repay US dollar loans in the local currency.

He said banks could borrow dollars from the central bank at a rate of 20 percent, but that money cannot be transferred abroad.

Lebanon’s economy has been battered by a series of political crises, compounded by the eight-year civil war in neighboring Syria.

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