Sayrafa exchange platform
had shy volume on first day
Rate was set around LL1,000 below parallel market
Trading was weak on the Sayrafa foreign exchange platform on the first day after the Central Bank (BDL) offered to sell the dollar at the parallel market rate and after it imposed more stringent conditions.
BDL had offered to sell the US dollar to banks at LL12,000 which is a slightly lower than the parallel market rate where the dollar was trading at LL12,825– LL12,950.
A banker said that it seems that BDL is now testing the market because it has set a specific time (from May 21 to May 25) for the banks to submit the requests of their customers for dollar purchases. BDL said it will settle the transactions on May 27. The banker who declined to be named said that BDL needs to inject $4 million to $7 million on a daily basis if it wants to stabilize the exchange rate. He said the Central Bank is not ready to deplete its reserves in this manner.
Antoine Maroun, Chairman of the Syndicate of Money Changers said that BDL has allowed them to trade foreign currencies on the Sayrafa platform at market rate.
Official trading on the platform had been halted for months after the parallel market exceeded by far the Sayrafa exchange rate of LL3,850-LL3,900 previously set by BDL.
Maroun said that the new procedures on the platform are complicated and need to be streamlined and that many money changers still don’t know how to use it and need ten to 15 days to familiarize themselves with it.
According to the new regulations, the purpose of the transaction must be stated and IDs and other documents could be required.
The banker said processing the requests of their customers necessitated IT support and that a transaction takes much more time than in the past as the applications will be submitted to BDL and the replies will come next week.
Mahmoud Morad, co-owner of MoradCo for Exchange said that, if for example, a client wants to buy dollars to pay for a student living abroad, the platform requires a number of documents including a photo of the passport, the university card, and the invoice. He said that some customers refuse to submit their IDs.
The complicated procedures delay the processing of transactions which would discourage some individuals who would then resort to the black market. Morad said that the Sayrafa platform will not dislodge the black market which was larger than the authorized money changer market that has a daily trading volume of just $4 million to $5 million.
Date Posted: May 21, 2021