Lebanese central bank seeks to strengthen currency after sharp weakening

BY Reuters | ECONOMIC | 01/14/22 11:02 AM EST

BEIRUT, Jan 14 (Reuters) - Lebanon's central bank said on Friday it was seeking to strengthen the Lebanese pound against the dollar after it weakened to a record low this week, fuelling fresh protests about rising prices and the country's collapsing economy.

"This initiative aims at curbing the volatility of the exchange market and aims at strengthening the pound value against the dollar," Governor Riad Salameh told Reuters, after the bank issued circular 161 and removed a ceiling related to bank purchases of dollars using the official Sayrafa exchange rate platform.

(Reporting by Laila Bassam and Nayera Abdallah; Editing by Edmund Blair)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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