All indicators today point towards grim prospects in the impending several months. Living conditions will decline in the wake of the current economic crisis to reach the worst point in Lebanon’s recorded history. The Lebanese national currency has lost over %80 of its own value (against the dollar) in the past few months, as the government and the Central Banks’ interventions of injecting dollar liquidity into the market failed to prevent the sharp decline of the Lira.
The most dangerous aspect of this collapse is the rapid rate of deterioration. The exchange rates fluctuated rapidly and sharply in the span of past few days or even hours. This phenomenon raised questions about the impact of black markets and their effects on the national currency, and whether they could be described as deliberate attacks. In that regard, economic and financial expert Samer Salemeh questioned whether it’s actually the case, but he instead likened it to political manipulation. In an interview with Janoubia Salemeh spoke about the extent which this crisis can reach.
The Lira is a Target of Political Manipulation
The surprise came on Tuesday as the dollar saw a soar in price from 8500 L.L reaching up to 10,000L.L in the span of 24 hours; only to come back down to 8000 a day later. Salemeh, who had warned that the dollar would reach 5000L.L before the summer and 20,000 by 2021 if no measures were taken, stressed that the rapid deterioration we are seeing is not justified.
Samer Salemeh, who is an expert on at-risk businesses, spoke to Janoubia and said that the collapse in the value of the national currency cannot be stopped; especially after the Central Bank’s decision to supply Lebanese Liras as an alternative to dollar withdrawals. This has caused great pressure on the value of the currency. His expectation of 5000L.L/$ by the summer came to be and at the correct timing.
The Black Market Accelerates the Decline
Salemeh pointed out that: “The decline in the Lira’s exchange rate exceeded all expectations as it reached 7000 and even up to 10,000 L.L/$ in a very short period of time! What happened was due to market manipulation by exchangers. It remains true that the rate will reach 10,000 eventually, but this doesn’t explain how quickly this has occurred.” He added: “There are some who are manipulating the monetary market, and because of that the decline will hasten and surpass 10,000L.L/$.
There Dollar Rate Has No Limit
Salemeh concluded that the manipulation has been going on for 3 months, and that the real rate should be around 5000L.L at the most. He rejected the notion that the arrival of tourists and expats played a role in the decrease of the exchange rate and labeled it as a rumor. “What is going on is political manipulation. There is no ceiling for the Dollar exchange rate!”