Import for smuggling... This is the main reason for the dollar crisis

Import for smuggling... This is the main reason for the dollar crisis

| Friday 13 January 2023

Omar al-Rassi, "Akhbar al-Yawm" agency


It would be a massacre for the Lebanese people if the Bank of Lebanon stopped intervening in the market!


The exchange rate of the US Dollar returned to reach the threshold of 50 thousand lira, as it seems that the measures taken by the Bank of Lebanon at the end of last month by intervening strongly in the market to pump more dollars through the Sayrafa platform, are "useless" amid the chaos prevailing on more than one level.

Economist Jassim Ajaka explains, via the "Akhbar al-Yawm" agency that the exchange rate is part of the chaos that pervades the country at all levels from cars driving without license plates to random prices, considering that the focus is on the exchange rate as it affects all people and everyone is affected by it.

Did the measures of the Bank of Lebanon, specifically in terms of "Sayrafa" operations for individuals and not institutions, lead to a rise in the exchange rate again? Ajaka explains that if the Bank of Lebanon stops interfering in the market -as some are demanding- it will be a massacre for the Lebanese people, pointing out that the exchange rate that reached 48 thousand this morning has a social dimension for the Citizen, where large numbers of people benefit from currency exchange and make huge profits, saying: Well, the central bank should then cut Sayrafa off from traders and leave it to the people.

So what is the reason for the constant rise in the exchange rate? Ajaka says: "it's import and smuggling," and explains that the annual import value amounted to about 19.5 billion dollars for imports, while Lebanon's need does not exceed a third of this amount, which means that two-thirds of imported goods are smuggled, and in return about 6.5 billion, especially expatriates, enter the country. He adds: and the government does not take measures to curb this import and therefore smuggling... Unfortunately, if there are those who cut off imports, if imports are cut off, they are cut off from the Lebanese and not from others, and the best evidence of what is happening is the level of fuel.

So what is the reason for the constant rise in the exchange rate?Ajaka says: "it's import and smuggling," and explains that the annual import value amounted to about 19.5 billion dollars for imports, while Lebanon's need does not exceed a third of this amount, which means that two-thirds of imported goods are smuggled, and in return about 6.5 billion, especially expatriates, enter the country. He adds: and the government does not take measures to curb this import and therefore smuggling... Unfortunately, if imports are cut off, they are cut off from the Lebanese and not from others, and the best evidence of what is happening is the fuel.

Repeating that the dollar crisis is the result of the existing conditions, especially the failure to stop smuggling, monopoly and price manipulation, Ajaka stressed that the current big problem is that the amount of USD 19.5 billion constitutes about 5 deposits in dollar. He continues: If the import was parallel to consumption and local needs, there would be the possibility of refunding people's deposits.

He concludes: a mafia is behind this reality...

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