June 15, 2020 / 1:54 PM / 21 days ago

Dollars trade at 4300-4500 Lebanese pounds after pledge of market intervention

BEIRUT, June 15 (Reuters) - Scarce dollars traded at 4300-4500 Lebanese pounds on Monday, market participants said, not far from rates seen last week when the president said the central bank would intervene to prop up the battered currency.

Lebanon’s President Michel Aoun said on Friday that the central bank would start injecting dollars into the market on Monday, trying to stop a currency crash that has led to economic hardship and sparked unrest.

There was no statement from the central bank or the presidency on the supply of dollars on Monday.

Market participants said there was chaos with differing exchange rates across the informal market, now a main source of cash for most people after banks imposed tight controls.

The local currency has lost more than 60% of its value since late last year, when Lebanon plunged deep into a financial crisis that has pushed the government to seek help from the IMF.

The heavily indebted state has kept an official dollar peg of 1,507.5 pounds but with foreign reserves dwindling, that rate is now only available for imports of fuel, medicine, and wheat.

One currency dealer said the price of dollars was 4,300 pounds on Monday, while another dealer and a customer said the greenback changed hands at 4,500.

A second customer said he sold dollars at 4,000 pounds.

The rate had jumped to about 5,000 last week, igniting protests in several cities, but then fell to 4,500 at some exchange bureaus on Friday after Aoun’s announcement.

In a bid to rein in the parallel market, the central bank launched a unified pricing system this month with the goal of lowering the price to 3,200. But importers have said dollars at the lower rate, which was set at 3,910 on Monday, have been unavailable. (Reporting by Ellen Francis and Tom Perry; Editing by Kirsten Donovan)

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