BEIRUT, Jan. 12 (Xinhua) -- Lebanon's Central Bank Governor Riad Salameh denied Sunday his reported intention to convert U.S. dollar deposits in Lebanese banks into Lebanese pounds, Banque Du Liban said in a statement.
The statement comes after an interview held on MTV local TV Channel on Thursday with Salameh who said that banks in Lebanon legally have the right to pay people's money in Lebanese pounds which sparked anger among the Lebanese.
The governor's remarks prompted the Lebanese to voice their fears over social media reports about the governor's intention to convert U.S. dollar deposits into Lebanese pounds at the regular official price of 1507.5 Lebanese pounds while the price of one U.S. dollar in the Lebanese market is currently valued at around 2,400 Lebanese pounds.
The governor said in the statement that his remarks during the interview on MTV meant that he does not object to banks' payments in U.S. dollar to their clients but banks have the right to pay people's deposits in Lebanese pounds.
Lebanon has witnessed in the past few months a shortage in the U.S. dollars caused by economic slowdown and the drop in cash injections from Lebanese abroad, reducing the central bank's foreign currency reserves and leading to a shortage in dollar for businesses and individuals.
Hence banks put restrictions on withdrawals of depositors and their transfers from Lebanese pounds to U.S. dollars, creating panic among depositors who resorted to withdrawing their money and storing them in their houses.
The high demand on U.S. currency created a parallel market where the dollar is sold at a remarkably higher price, incurring problems for importers, mainly those need the foreign currency to import their needs.