BDL issued Intermediate Circular 601 on 9/12/2021 that replaces Basic Decision number 13221 of Circular 151, issued on 21/4/2021, with Intermediate Decision Number 13377, in relation to the “exceptional measures concerning cash withdrawals from foreign currency bank accounts”. The new Decision asks banks to honor customers’ withdrawals from their USD deposits at the exchange rate of 8,000 LBP instead of the 3,900 LBP that was set previously. It also limits withdrawals to 3,000 USD each month. The new Decision is effective immediately and has a duration that ends on 30/6/2022.
BDL has resisted in the past to amend upwards the LBP rate for USD deposit withdrawals on the assumption that it will lead to higher LBP liquidity and in turn cause further depreciations in the exchange rate and more rapid inflation. Two possible explanations could be put forward for BDL’s new Decision: first, to ease people’s liquidity constraints for transactions and purchasing purposes; second, to bring the multiple exchange rates closer together so as to ultimately unify them per an IMF reform program.
| November 2019 | November 2021 | |
| Exchange Rate per USD | 1,900 | 24,300 |
| Currency in Circulation (Trillion LBP) | 6.5 | 43.5 |
| BDL Foreign Assets (Billion USD) | 38.1 | 18.2
|
| USD Deposits (Billion) | 120.6 | 140.6* |
*For October 2021
Source: Banque du Liban, BLOMINVEST Bank