Diab Says Central Bank to 'Protect' Currency, 'Subsidize' Basic Food Imports
Prime Minister Hassan Diab said the Lebanese will see a “decline” in the prices of goods and that the Central Bank will interfere to stop the currency depreciation and support the import of some food supplies.
Diab said he received a “promise from Central bank governor Riad Salameh to interfere and curb the depreciation of the Lebanese currency, and support the import of some food products. The Lebanese will soon see a decline in prices,” said Diab.
The central bank last month ordered exchange offices to cap the rate at 3,200 to the dollar, but the pound has continued to tumble.
Lebanon on Monday charged a top central bank official with manipulating the exchange rate, and has detained dozens of money changers in recent weeks as part of a larger crackdown on currency manipulators.
Shortly after Diab's speech, Salameh said "necessary measures to protect the Lebanese pound" would come into effect on May 27.
The central bank "will secure dollars for the import of basic food products," in coordination with the economy ministry as part the measures, Salameh said in a statement.
The PM was addressing the Lebanese marking 100 days since the government gained the Parliament’s vote of confidence.
He said his government “did indeed make a lot of achievements,” knowing that it assumed power and the “country was sinking at a record speed.”
“We discovered that the state treasury was empty and we did not hesitate to announce our inability to pay Lebanon's debts in Eurobonds,” added Diab. “The evaluation of the government's performance is up to the people and also to the world, who surprisingly watched what we accomplished.”
The outbreak of coronavirus COVID-19 has “drained further our efforts and time,” added the PM.
“We are on the right track today with the implementation of CEDRE decisions in parallel with our negotiations with the IMF. These will set a solid ground to reconfigure the financial and economic structure of Lebanon,” said Diab.
Acknowledging that Lebanon faces “very difficult circumstances,” he said that “Lebanese have reached the point of despair that reform can take place. Our problem is that people’s value in Lebanon is very low and the authority protects itself before thinking about protecting people in Lebanon.”