The pound suddenly fell in the market before recovering a few points.
Dwain Ross
19 / May / 22
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Having fluctuated between 20,000 and 21,000 pounds to the dollar for several weeks, yesterday the dollar against the pound suddenly fell in the foreign exchange market, reaching and exceeding 24,000 pounds before returning to 22,500 pounds at the end of the period. day (according to lirarate.org).
The stagnation that began on Tuesday, the next day after that, the rate stabilized above the mark of 21,000 pounds. The stagnation has also been felt by some speculators since the beginning of the week in the “traders” circles that specialize in redeeming bank checks in cash, a deregulated practice that cannot be controlled. “Discount rates offered for cash checks have generally increased by a few points to close to 20% (a £100m check can be sold for £80m in cash, editor's note). This usually means that players in this market expect the exchange rate to fall and are ready to sacrifice part of the value of the check now in order not to lose more later, ”says an insider.
According to information compiled by our sister publication L'Orient Today, there are several factors behind this dollar-to-pound slippage in the foreign exchange market, which is still under control.
Firstly, several banks reportedly stopped selling dollars at the rate of the Banque du Liban (BDL)-operated Sayrafa exchange platform after their daily quotas were exhausted. This option has been opened by BDL for banking institutions since 2021. As reported by L'Orient Today, the quota of one of the largest banks in the country was noticeably exhausted in the early hours of the day after several large transactions were recorded. In addition, according to our sister publication, some banks have also notified the companies they work with that they will stop selling dollars at the Sairaf rate.
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This development raised concerns among depositors about the continuation of BDL Circular No. 161. Launched in December and extended until the end of March, this system allows the bank's customers to withdraw in dollars and at the rate of Sayraf part of their funds in pounds deposited in Lebanese banks . The dollars are sold directly to the BDL banks, which draws them from its foreign exchange reserves (which fluctuate between $11 and $12 billion, not including gold, according to a statement by Deputy Prime Minister Saadeh Shami, invited by the Economic Council and Social Committee). ). These fears increased demand in the foreign exchange market and, as a result, increased the dollar against the pound sterling.
Other sources indicate that BDL had to cut back on the amount of dollars injected into the market in order to stabilize the exchange rate in the £20,000/£21,000 range. An increase in the bill for subsidies on the exchange rate for imports of gasoline (which he does partially support) and wheat, whose prices have soared on world markets since the start of the war in Ukraine, is in question. .
While the central bank did not comment on these various points, it did not remain silent. In a press release issued in the afternoon, his press office assured that it had not stopped selling dollars to banks at the Sairaf rate, in response to information reported by some media outlets that indicated otherwise. At the end of the day, the central bank finally indicated that $60 million had been exchanged yesterday at an average rate of £20,550 to one dollar (compared to £70 million and £20,220 the night before).
Having fluctuated between £20,000 and £21,000 to the dollar for several weeks, the dollar against the pound suddenly fell yesterday on the foreign exchange market, hitting and breaking £24,000 before bouncing back to around £22,500 at the end. days (according to lirarate.org). The shop started on Tuesday, the next day.
