On March 9, the Lebanese pound jumped from around 20,000 Lebanese pound (LBP) to the dollar to approximately 24,000 LBP. LIMS explained that Sayraf platform used by the central bank (Bank du Liban or BdL) to pump US dollars into the market stopped working for a short while. The halt was interpreted by market participants as an inability or unwillingness of BdL to provide more dollars. This scenario is plausible because the central bank has been trying to defend the overvalued 20,000 LBP to USD rate while draining the remaining foreign exchange reserves.

Furthermore, LIMS highlighted that since the start of the war in Ukraine, the loss of FX reserves accelerated, given the need to finance a more expensive fuel bill and an ever-increasing wheat subsidy. A general distrust in both monetary and fiscal authorities compounded this external factor. The constant depletion of the central bank’s reserves fuels the doubt in the local institutions.

Later, BdL issued a statement declaring the willingness to inject an unlimited amount of dollars to defend the exchange rate, which calmed the market. LIMS interpreted this matter as proof that the Lebanese pound is overvalued and does not reflect the reality of the market. In the end, we will reach a stage where the depositors’ dollars, used to stabilize the currency, will expire, and the central bank will no longer be able to intervene, which will lead to another uncontrolled devaluation. Therefore, Lebanon should reform its monetary policy and move from the current discretionary one to a rule-based monetary arrangement by adopting a currency board. Such a reform would allow for a stable exchange rate regardless of internal and external shocks.

• With Over $1 Billion In Central Bank Losses, Will It Last Until Election Time? March 8, 2022: Lebanese Forces, Article AR
• From “They Didn’t Let Us” To “We Can’t .”Congratulations If You Can Get A Tank Of Gas, March 8, 2022: Lebanese Forces, Article AR
• Dr. Mardini Clarifies Effect Of Russia-Ukraine War On The Exchange Rate, March 9, 2022: Leb Economy, Article AR
• Dr. Mardini To Tayyar.org, “This Will Raise The Exchange Rate To An Unprecedented Level,” March 9, 2022: Tayyar.org, Article AR
• Will The Dollar Rate Rise Again? March 9, 2022: OTV, TV Interview AR
• Why Are Fuel Prices On The Rise Once More? March 9, 2022: NBN, TV Interview AR
• Inflation and Currency Devaluation Benefit Cabinet And Banks, While Harming Citizens And Productive Sectors, March 9, 2022: MTV, TV Interview AR
• “Pressure Test” Measures Market’s Reaction To Rumor About Suspending Sayrafa Platform, Dollar Rises After “Resting”  At Start Of Managed Float, March 10, 2022: Nidaa Al Watan, Article AR 
• Warnings Of Dollar Rate Hike And What’s To Come, March 11, 2022: Spot Shot, TV Interview AR
• Lebanon Not Alone In Currency Devaluation, March 16, 2022: MTV, TV Interview AR
• Lebanese Pound Crisis: Economic Effect, Reasons Behind It, And Solutions, March 24, 2022: NNA, Article AR 
• Dollar Is World’s Exchange Currency and Russia’s Decision To Sell In Ruble Aims To “Extend Currency’s Resistance,” March 27, 2022: Addiyar, Article AR 
• The Future Of The Dollar Rate In Jeopardy, March 28, 2022: Grand LB, Article AR
• Why Did The Rate Of The Dollar Increase Again? Will It Rise Even More? March 30, 2022: Annahar, TV Interview AR