The Lebanese Pound’s (LBP) long-standing peg to the US dollar is becoming increasingly strained with unofficial rates trading well above the official 1,500 LBP to $1 rate this week, soaring north of 1,600 LBP for the first time. Bank customers also reported difficulty withdrawing US dollars from ATMs in local banks.
The Pound’s peg to the dollar is seen as one of the few stabilizing factors in Lebanon’s otherwise stagnant economy, but experts (including the IMF and rating agencies) are increasingly questioning the Central Bank’s ability to prop up the peg – and by extension the all-important commercial banking sector (MEES, 6 September). (CONTINUED - 130 WORDS)