Lebanese lira to USD exchange

nosense · 2019-10-28T20:39:26+00:00

Hello guys, I'm creating this thread so we can discuss the exchange rate for lira against USD. Today the price on some foreign exchanges changed, although...

Kareem

NuclearVision wrote
Kareem wrote
NuclearVision wrote That is quick! What the hell is happening
That's pretty normal.... the true exchange rate is 3000LL per dollar. We're catching up slowly.
according to what, who ?

According to the economical situation in the country, the demand and supply. No fresh dollar is coming from abroad so your reserve is getting lesser.

NuclearVision

would it jump beyond 3000?

kareem_nasser

True, since 1990s the real value of the dollar is around 3000 by supply and demand. But some say not just the "financial engineering" fixated the rate but also politics.

Kareem

kareem_nasser wroteTrue, since 1990s the real value of the dollar is around 3000 by supply and demand. But some say not just the "financial engineering" fixated the rate but also politics.

It's not politics or financial engineering, the thing is that the government and BDL wanted to borrow money, but the banks wouldn't accept because the LBP rate was fluctuating.

So BDL reassured the banks by fixing the rate at 1500 LBP/USD so they can lend him money despite the huge interest rate.

As of today, the rate is still 1515 and BDL is doing its best to protect the money of the banks ( not people ) although a much higher rate would mean less debts but nevertheless they insist on it.

nefe_lpmk

What's the exchange rate like today, anyone tried?

nuclearcat

http://lebaneselira.org/

nosense

nefe_lpmk wroteWhat's the exchange rate like today, anyone tried?

2050

NuclearVision

Why doesn't the gov enforce the fixed rate or ban usd exchange.
I'm positive that exchangers are just making up these values.
There's no way that usd demand is increasing day after day

nosense

NuclearVision wroteWhy doesn't the gov enforce the fixed rate or ban usd exchange.
I'm positive that exchangers are just making up these values.
There's no way that usd demand is increasing day after day

many people are still converting their money from lbp to usd even at these rates

NuclearVision

nosense wrote
NuclearVision wroteWhy doesn't the gov enforce the fixed rate or ban usd exchange.
I'm positive that exchangers are just making up these values.
There's no way that usd demand is increasing day after day
many people are still converting their money from lbp to usd even at these rates

I agree, but this doesn't mean that demand is increasing....
There was demand before.
Not to mention that banks are not giving 50-100mil lbp amount for this specific reason, or so the guy on the TV said.
I don't blame the people for securing their savings, but the collectivit doing this is just making things worse, and there's no monitor of exchangers! Usd is not a merchandise.. Even merchandise undergo price monitoring.

anayman_k7

I think that it is not only a matter of people converting money, we are talking about importing items from Outside, hence why a lot of the prices of the imported items in the Supermarkets are increasing

rolf

NuclearVision wroteWhy doesn't the gov enforce the fixed rate or ban usd exchange.

IDK but I don't think it would help to ban anything.

People will exchange money on the streets, and in their living room.

And by the way the price will become even higher, like what happens with drugs when you ban them.

Anyway in Lebanon the police is weak. This type of communist policy that you described need a lot of enforcement resources to scare or catch people.

nuclearcat

NuclearVision wroteWhy doesn't the gov enforce the fixed rate or ban usd exchange.
I'm positive that exchangers are just making up these values.
There's no way that usd demand is increasing day after day

Trading disbalance making it.
Let's say lebanon imported goods for last $1000000 in country (gave them away to external world) and sold this stuff on internal market for 1500000000LL, some this stuff also used to produce export to external world.
But your export only $250000.
Now your traders have on market 1500000000 LL and exchanges have money from exporters only $ 250000, for next import.
Your exchange course is 6000 LL/$1 now.
Thats it.

rolf

I am sure that some of the demand is speculative. That means people are holding US dollars waiting for the price to increase so that they sell them again

NuclearVision

nuclearcat wrote
NuclearVision wroteWhy doesn't the gov enforce the fixed rate or ban usd exchange.
I'm positive that exchangers are just making up these values.
There's no way that usd demand is increasing day after day
Trading disbalance making it.
Let's say lebanon imported goods for last $1000000 in country (gave them away to external world) and sold this stuff on internal market for 1500000000LL, some this stuff also used to produce export to external world.
But your export only $250000.
Now your traders have on market 1500000000 LL and exchanges have money from exporters only $ 250000, for next import.
Your exchange course is 6000 LL/$1 now.
Thats it.

And why didn't this happen in the past 20 years?

nuclearcat

NuclearVision wrote
nuclearcat wrote
NuclearVision wroteWhy doesn't the gov enforce the fixed rate or ban usd exchange.
I'm positive that exchangers are just making up these values.
There's no way that usd demand is increasing day after day
Trading disbalance making it.
Let's say lebanon imported goods for last $1000000 in country (gave them away to external world) and sold this stuff on internal market for 1500000000LL, some this stuff also used to produce export to external world.
But your export only $250000.
Now your traders have on market 1500000000 LL and exchanges have money from exporters only $ 250000, for next import.
Your exchange course is 6000 LL/$1 now.
Thats it.
And why didn't this happen in the past 20 years?

Oversimplified - Lebanon was constantly burning remittances, money in bank accounts. They are digits only now.
There was some schemes some "groups" was running, bringing money, they are blocked by sanctions now.
There is no more steady flow of money anymore last 2 years.

user

There is no floor to how low it can go. Other than that we export very little, the fact that we allow the US dollar to be circulated inside our country makes the lira totally worthless... If given the choice between trusting the US government and trusting the Lebanese government with notes, everyone will intuitively opt for the US dollar...

A weak currency could be a great thing in the long run, and people becoming poor now could be a good thing for the long run I am sorry to say this but... The artificially strong currency has blinded people from corruption, they always felt that the increasing public debt and the corruption all over does not hurt them, now they will see that it hurts a loot, and they will be much more critical. The weak currency will drive us to produce things locally, it will drive us to push for public transportation fixes rather than import 5 billion dollars worth of cars and then another 5 billion worth of petrol...

nuclearcat

rolf wroteI am sure that some of the demand is speculative. That means people are holding US dollars waiting for the price to increase so that they sell them again

No, mostly they are afraid to keep them in banks, and many just took out of bank to put under pillow for better times, they think it is bad to invest now. Actually they aggravated situation by removing money from economy and it will turn things to gravely bad very quick.
If decline is too fast... i dont want to scare anybody, but this money under pillow wont be safe anymore.
Also people forgot that money should work, there is no miracle you put large sum in lira and live on miraclously appearing % from bank, i know many lebanese who lived from this.
This % have to appear from something where bank invested, and i dont see any significant profitable businesses who is getting investments from local banks on such amounts and with such profits.

nuclearcat

user wroteThere is no floor to how low it can go. Other than that we export very little, the fact that we allow the US dollar to be circulated inside our country makes the lira totally worthless... If given the choice between trusting the US government and trusting the Lebanese government with notes, everyone will intuitively opt for the US dollar...

A weak currency could be a great thing in the long run, and people becoming poor now could be a good thing for the long run I am sorry to say this but... The artificially strong currency has blinded people from corruption, they always felt that the increasing public debt and the corruption all over does not hurt them, now they will see that it hurts a loot, and they will be much more critical. The weak currency will drive us to produce things locally, it will drive us to push for public transportation fixes rather than import 5 billion dollars worth of cars and then another 5 billion worth of petrol...

Weak currency just allows "controlled burn" of accumulated wealth and purchasing power, but there is no miracle in it.

bobo619

What Lebanon is experiencing right now is called hyperinflation which in economic terms means that prices have increased by 50% . Where as a healthy economy should be around 2-3% per year. It is a very bad thing for poor and wealthy individuals alike. If this continues the central bank of lebanon will have to increase its denomination to cope with the devaluation of its currency just like what happened in the past. The problem is that the Lebanese Pound is considered a fiat currency whereas it is not backed by intrinsic value such as gold,silver... This conclude that its true value is held only by trust towards the government and nothing more and that trust just shattered. Lebanon rely 80% of import which are purchased in foreign currencies to produce goods and sevices hence the demand of USD to import those goods and the inflation in question. A good example would be if a mobile shop want to import an Iphone to sell it here he would buy it from abroad for around 1200$ in which he had to convert 2 400 000 L.L(1$=2000LL) to acquire the 1200$ in the first place. Now the customer who wants to buy the Iphone the true value is not 1200$ rather it is 1584$ if he want to purchase it in Lebanese pound (2 400 000 LL ). If the customer is willing to pay cash in USD then the shop will offer it for 1200$ because he can convert it to 2 400 000LL but most of them will sell you at the official rate which is 1515 to gain more profit(1584$=3 168 000 LL) if you do math it equals to ~43% price increase in LL.

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