Hobeika to "Al-Akhbar" agency: "The first step begins in negotiations with the International Monetary Fund (IMF)".
Rania Shakhtoura, “Akhbar Al-Yawm” agency
As soon as President Saad Hariri announced his recusal, the "US dollar" jumped, touching 23,000 Lebanese pounds before noon, after crossing the 20,000 liras yesterday for the first time.
This rapid decline in the currency is not separate from the severe crisis that Lebanon has been experiencing since the fall of 2019, when the national currency devalued more than 10 times against the dollar, leading to a rise in the prices of most products and goods by more than 400%.
At this time, we are reminded of the report published by Bank of America in early July 2020 that the dollar is likely to hit the 46,500 lira threshold at the end of last year. However, it seems that we are heading towards this number, as unprecedented inflation in the size of the lira's monetary mass makes it very weak against foreign currencies.
The biggest fear is that the former chairman of the banking oversight committee, Samir Hammoud, expected the exchange rate of the dollar to reach 999,000 Lebanese pounds, explaining -in an interview on 7 June- that he had predicted in 1984 that the exchange rate of the dollar would reach three figures and that was what happened, he said: "today if we continue this way over two years, the exchange rate will reach six figures, i.e. 999,000 LBP.
"What happened yesterday made people feel scared, so they resorted to collecting and "hiding" dollars", said the economist Louis Hobeika, speaking to "Akhbar Al-Yawm" agency. In addition, many traders now demand the dollar exclusively.
"What happened yesterday made people feel scared, so they resorted to collecting and "hiding" dollars", said the economist Louis Hobeika, speaking to "Akhbar Al-Yawm" agency. In addition, many traders now demand the dollar exclusively.
Regarding the solution, Hobeika points out that forming a new government may be very difficult, and everyone knows there is a long way to go from binding parliamentary consultations to securing parliamentary confidence in the government, and it must be borne in mind that parliamentary elections are supposed to be held in ten months' time.
Therefore, the most appropriate solution today may be to increase the authority of the “caretaker government” by issuing decrees authorizing it to meet and take decisions.
"The first step is to reopen the discussion with the IMF," he says.
Could the exchange rate fall if a political settlement is agreed? He said: "Of course, but after the formation of a government and an agreement with the Monetary Fund which may pump dollars into the Lebanese market".
And if that happens, is there a possibility that we're going a fall in prices? He answered: "It will take time".