Acting Governor of the Bank of Lebanon, Wassim Al-Mansouri, said last week that a new platform will be provided through Bloomberg, which will replace the internal system known as Sarfa, amid concerns regarding transparency and governance at Sarfa.
Salim Shaheen, one of the bank’s deputy governors, said the caretaker government had approved the platform, and it would be established “within a month or a few weeks.”
Its launch will coincide with the Central Bank’s issuance of a new set of circulars that define the qualifications, roles and regulatory mechanisms for authorized users, known as market makers.
Shaheen said, “Market making is not a job that suits everyone. Many exchange offices may not meet the requirements necessary to become licensed,” adding that the institutions “will carry out the required scrutiny to ensure that the dollars in circulation are from legitimate sources.”
The Lebanese pound has lost more than 98 percent of its value in the parallel market since the economic collapse in the country began in 2019, and banks imposed restrictions on access to deposits.
The economy’s increasing dependence on cash has raised concerns about illicit flows of funds, and the possibility that the country will be subject to special scrutiny over substandard practices to prevent money laundering and terrorist financing.
The new platform aims to help the Lebanese currency move to a managed float by the end of this month, after being linked to the dollar for a long time.
In February, the Central Bank reduced the exchange rate in effect for decades from 1,500 liras to the dollar to 15,000 liras.
Shaheen said that he expects the exchange rate on the platform to be close to the parallel market, which will limit arbitrage.
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