İrem GÖL -TDO- According the Al Jazeera, Lebanese financial prosecutor ordered the detention of the head of monetary operation at the central bank, Mazen Hamdan. This has been the first move against an official at the institution since the currency crisis started last summer. 1$ is exchanged with 4,200 Lebanese pounds in the black market. Together with the devaluation, the country also suffers from an acute dollar shortage due to fallen remittances, corruption and unsustainable fiscal policies.
The Lebanese pound has been decreasing since last August. In the late April, it lost 12% of its value in a single day leading to nationwide street protests and riots. The government blamed the central bank for causing the devaluation by failing to inject dollars into the market to stabilise the currency. The Prime Minister Diab also alleged the central bank governor may be trying to intentionally hurt the currency.
The former economy minister and central bank vice-governor Nasser Saidi said: “Depreciation results from the central bank financing budget deficit by printing money, unsustainable fiscal and debt policies, deep recession and nothing to anchor Lebanese Pound expectations.” Dan Azzi, an economic analyst and former CEO of Standard Charterer Bank of Lebanon told: “While there have been some instances of currency manipulation, which is not expected when the currency peg falls apart after 22 years, the Lebanese pound is dropping primarily because there isn’t sufficient dollars being pumped by the central bank or coming from overseas to lift it.”