Report: Economists Fear Consequences of ‘Shifting’ Govt. Responsibilities to BDL

W460

As Lebanon grapples with a worsening economic crisis, economists fear the consequences of pushing the central bank to assume a role that is supposed to be the responsibility of the government, al-Joumhouria daily reported on Tuesday.

“The government evaded its responsibilities in the economic issue, shifting it to the central bank of Lebanon (Banque du Liban), which has become entrusted with the protection of stability,” economist Ghazi Wazni told the newspaper.

“Financing the economy and regulating the imports operations was also added to the central bank’s responsibilities, although they should not be part of it. This process will lead to additional drain of BDL’s foreign reserves,” warned Wazni.

On Monday, Central Bank Governor Riad Salameh said after meeting President Michel Aoun that the bank will secure foreign currency for some imports in a move that is expected to ease the demand for hard currency. He noted that BDL will issue a circular on Tuesday to regulate ways to fund imports of fuel, medicine and wheat.

Wazni noted that this circular will have to secure $ 4 billion to ensure the import of these materials for a whole year which will increase the pressure on the bank’s foreign reserves, and weaken its ability to perform its basic function of ensuring the stability of the national exchange rate.

He said it will also open the way for other economic sectors to demand similar facilitation.

The first move was made on Monday by the Industrialists Association who issued a statement demanding that the circular includes the import of raw materials used in the industry. Wazni said that other sectors could follow suit.

On Sunday, hundreds of Lebanese protested in the country's capital and other areas over an economic crisis that worsened over the past two weeks, with worries over dollar-reliant Lebanon's local currency losing value for the first time in more than two decades.

Last week, the local currency reached 1,650 Lebanese pounds to the dollar at exchange shops after it had been stable at 1,500 since 1997. Although the official price is still pegged at 1,500 pounds to the dollar, people find it difficult to get hard currency at this rate from local banks.

Comments 5
Thumb EagleDawn 01 October 2019, 10:37

Breaking News:

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The Joke of the Day
Like Every SIngle Day

Thumb _citizen_ 01 October 2019, 11:10

My favorite shia troll of all times is...... blablablablablabla

Thumb doodle-dude 01 October 2019, 11:30

Economists fear the consequences of blablablablabla shifting the revenues earned when virile young men penetrate his deep and wide luv tunnel into the local currency as it deprives the treasury of a huge source of hard currency.

Missing un520 01 October 2019, 12:08

This is the ultimate surrender and admission by the politicians. We have known for a long time that they are incompetent and clueless, and its nice to see that they finally admit it...

Thumb beatryce 01 October 2019, 13:08

mon cheri Jaafar, c'est trop!

"Rien ne va plus".....c'est ça! J'appelle sayyed hassan maintenant!