Lebanese pound on its way to 50 000 LBP/ USD...As a result of the loss of confidence in the State

Lebanese pound on its way to 50 000 LBP/ USD...As a result of the loss of confidence in the State

عمر الراسي | Thursday 01 December 2022

Omar al-Rassi, “Akhbar al-Yawm” agency

Customs duties alone are not enough and we must start canceling fake jobs

The US dollar exchange rate in recent hours has exceeded the threshold of 41 thousand, and it seems that it is making its way towards fifty thousand, similar to the continuous rise since the Fall of 2019, without any deterrent represented by reforms and putting the banking and financial sectors back on the right track...

The additional deterioration of the Lebanese pound comes in the wake of a presidential vacuum and institutional paralysis, as the 8th Session of the presidential election was held today a month after the closure of the doors of the Republican Palace, but no head of state has been chosen.

On the continuous deterioration of the lira, the Chief Economist at Byblos Bank, Nassib Ghobril, said via "Akhbar Al-Yawm" agency that the rise in the dollar exchange rate is the result of a loss of confidence, especially since those concerned were not serious in implementing structural reforms that lead to the restoration of confidence and thus the flow of capital in Lebanon and to the availability of liquidity in the markets.

He said: the parallel market for the dollar exchange rate appeared in September 2019 as a result of the lack of liquidity in foreign currencies in the Lebanese economy, considering that there are no controls for this non-transparent, unregulated and uncontrolled market and therefore subject to speculators benefiting from political cover-ups, as the demand for hard currencies from abroad also affects the dollar exchange rate. As long as there is insufficient liquidity in the economy and confidence is missing, the possibility of speculating on the exchange rate will continue.

On the impact of the start of the application of the LBP 15,000 customs dollar rate today, he said: What is more correct is to increase the customs tariff, the aim of which is to cover the increase in salaries, wages and allowances of public sector employees and workers. But there are several measures that the state can resort to that enhance confidence and confirm that there is a seriousness in dealing with the issue of securing revenues, including combating tax evasion, activating collection according to customs evasion and combating cross-border smuggling in both directions.

Here, Ghobril pointed out that the decline in revenues is not only due to the economic crisis, but also the strike of public sector workers, which harms employees first of all, as the longer transactions are delayed, the later the revenue enters the Treasury.

Noting that it is necessary to support the purchasing power of workers and employees in the public sector, Ghobril called on the state to seek revenues to cover salaries and wages in the public sector, and not only from customs duties, through reforms in the public sector, starting with the abolition of thousands of fictitious jobs, which shows seriousness in dealing and intention to reform.

Responding to a question, Ghobril supported the amendment of the customs tariff, since companies may not pay their taxes based on 1,500 LBP, and sell goods at prices higher than the dollar exchange rate in the parallel market, but at the same time it is necessary to look for other sources for treasury revenues.

 

 

 

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