How to operate in a country where the local currency is unscrewing, inflation is rampant and the financial system is thirsty for currencies, without leaving too many feathers – in this case, tens of millions of euros, in the coffers of banks private or central bank? This questioning has become major for humanitarian workers in Lebanon and Syria. In these two countries gripped by the financial crisis that erupted in Beirut in October 2019, the banking systems managed to capture currencies on United Nations aid, by imposing unfavorable exchange rates.
In Lebanon, the UN and its donors have had to fight to be able to exchange currencies in private banks at the real rate (the dollar exceeds 20,000 Lebanese pounds on the black market, against 1,500 officially), and not at a much lower value. An agreement was wrested from the Central Bank in April, after lengthy negotiations, and after attempts by this institution to impose an unfavorable intermediate rate, in the face of which the threat of a suspension of UN programs was brandished. “It was unacceptable that part of the funds benefited the banks and not the recipients of the aid”, underlines Najat Rochdi, United Nations resident and humanitarian coordinator in Lebanon since summer 2020, who took part in the discussions. The bankrupt banking system sucked, between October 2019 and spring 2021, at least $ 250 million (216 million euros) in aid from the UN, estimated the Thomson-Reuters foundation in June.
Despite the agreement of April, mistrust remains: the amounts allocated to the programs are transferred in small installments, in order to prevent any derailment. Another dispute remains: the negotiated exchange rate does not apply to donor funds transferred to Lebanon before October 2019. “We received a categorical no [de la Banque centrale] to change this “, says Mme Rochdi.
One hundred million dollars snapped up in 2019-2020
In Syria, the currency stall has long followed the collapse of the Lebanese pound. If the financial crisis in Beirut is heavy, it is because significant Syrian assets were in Lebanese banks. The United Nations was able to negotiate on several occasions, between the end of 2019 and April, a preferential exchange rate in Damascus. But this was still lower than the parallel market. The dollar is exchanged there today at more than 3,400 Syrian pounds (or about 2.33 euros), against 2,500 at the official rate since September, that which the UN must follow in its transactions with private banks.
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