March 6, 2020 / 11:16 AM / 25 days ago

Lebanese central bank tells dealers not to exceed official forex rate more than 30%

FILE PHOTO: A man counts Lebanese pounds at an exchange office in Beirut, Lebanon, August 16, 2018. REUTERS/Mohamed Azakir

BEIRUT (Reuters) - The Lebanese central bank told foreign exchange dealers on Friday they should not buy foreign currencies at prices more than 30% beyond the rates set by the central bank, seeking to bring down the price being paid for hard currency.

The Lebanese pound, pegged against the dollar at the rate of 1,507.5 pounds for more than two decades, has slumped since the country descended into a financial crisis last October.

Based on the current peg, the central bank’s instruction means currency dealers should not pay more than around 2,000 pounds for a dollar, compared with the 2,630 pounds one dealer said he was offering for a dollar on Friday.

The central bank said foreign currency dealers should refrain from any trade that did not stick to this percentage it had set. The decision applies for six months.

It marked the second attempt since January to control the price being paid for hard currency by foreign exchange dealers.

Lebanon’s union of exchange dealers said in January it had decided to set the rate at a maximum of 2,000 Lebanese pounds to the dollar in agreement with the central bank governor - a price that did not hold.

Writing by Tom Perry; editing by Kevin Liffey, Larry King

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