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An official source told “Reuters” that Lebanon has around $ 1.8 billion in foreign exchange reserves that could be available to support imports of staple foods and other imports, but could preserve its survival for another six months by canceling subsidies. to some commodities.
Lebanon, which suffers from a heavy debt burden, is facing the most serious economic crisis since the 1975-1990 civil war, which affected the local currency and caused prices to rise. Many Lebanese have fallen into poverty and have become more dependent on subsidized food.
The decline in support heralds a surge in popular anger in a country devastated by protests, when the crisis erupted in 2019.
Central Bank Governor Riad Salameh, who declined to comment for this report, says the subsidies will have to stop once the mandatory limit on foreign exchange reserves is reached, without indicating a timeframe.
The official source told Reuters that the still-available reserves of $ 1.8 billion could be maintained for another six months by reducing subsidies for a variety of staples such as cashews and vitamins.
The source did not give a detailed list.
In light of the depletion of dollar resources, the Central Bank provided foreign cash for imports of fuel, wheat and medicines at an official price set at 1,507.5 Lebanese pounds per dollar, which is much lower than the negotiated price. That according to the distributors reached around 8,700 today Thursday.
A list of around 300 other food and staples is subsidized at 3,900.
In August, Salameh told Reuters that the central bank’s foreign exchange reserves stood at $ 19.5 billion and the mandatory limit for reserves was $ 17.5 billion.
Some analysts say that central bank reserves may in fact be lower than previously announced figures due to incurring losses in light of the currency crisis.
Nafez Sawouk, chief economist and emerging markets analyst at Oxford Economics, said: “Throughout this year we realized that reserves are eventually running out and no steps have yet been taken to create a social safety net.”
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