[ad_1]
Optimism. Given the total absence of good news, this is what the public felt when the news of the start of the drop in food prices was spread due to the fall in the dollar exchange rate. In two days, the exchange rate rose again and, in turn, the hope of citizens deteriorated. But what is the criterion for lowering prices? As for a positive environment for the formation of the government, and expectations of a decrease in the exchange rate parallel to its formation, will prices decrease?
Following the statement issued by the Union of Food Importers, the citizen expected to buy his usual food basket at a lower price than recently. However, this news was a “misunderstanding” from the beginning. The head of the Union of Food Importers, Hani Bohsali, explains to Al-Diyar that it was clear in the statement that the price reduction of unsupported products comes “ after the stabilization of the dollar exchange rate in the market black for a long period, not just two days, as it happened. As for the food products subsidized by the Banque du Liban, their prices will not be reduced, as the dollar exchange rate is still over 3,900 pounds.
Bahsali continued: “We do not deny that there are some violations by some stores, but the price increase was not implemented overnight, but increased gradually. For example, the rise in food prices, which occurred three months ago, occurred after touching the exchange rate of 9,000 pounds for several months.
When does the exchange rate stabilize?
The economist d. Elie Yashouei, “The exchange rate is affected by four factors, namely; The economic factor, the psychological factor, the political factor and the speculative factor. The economic factor has not changed as the dollar exchange rate depreciates. As for the speculative factor, it is related to my political and psychological factors. How the speculator creates a downward or upward trend immediately after the occurrence of a political event. This event can be positive or negative, on the basis of which the speculator will act ”.
Dr. Yeshoei added: “If the event is positive, and this is what happened a few days ago with the appointment of the prime minister, the speculators offer a dollar amount in the market. This amount leads to a drop in the dollar exchange rate, which makes some citizens spend their dollars, under a psychological pretext, for fear of its long-term decline. In other words, speculators create a specific tendency for people to profit in foreign exchange. “And Dr. Yashouei noted that” in countries around the world, what weakens and loses speculators is central bank reserves. But in Lebanon, the weakest speculator is stronger than the central bank. “
As for stability, it requires the economic factor. In other words, it requires, according to Dr. Yashouei, “The flow of capital to Lebanon of at least 20 million dollars, through a transparent mechanism and away from personal benefits, to rebuild the national capital. And that is through an alliance between the public and private sectors, since all the public services that the state owns, infrastructure projects, etc. are made available to companies. This is one of several solutions that Lebanon could apply to save the rest of its economy.
In other words, the “event” of the formation of the government will move speculators and perhaps the exchange rate will stabilize for a temporary period due to the magnitude of the event. However, effective stability in the low dollar exchange rate lies when the government implements effective economic solutions.
Is there censorship?
In the absence of a price drop pending the stability of the exchange rate, who monitors the process of setting food prices in supermarkets? Bohsali says that censorship is primarily subjective. As the citizen is interested in the prices and the high prices between various supermarkets due to the decrease in their standard of living. Second, the control of competition, since supermarkets compete with prices and will lose their customers if they increase prices in a crazy way. Third, monitoring by the Ministry of the Economy, which does not carry out immediate inspections, but intervenes with high prices in the medium or long term. Since it cannot interfere with the merchant’s profit percentage, the merchant cannot exceed a certain percentage of the cost rate.
No, don’t expect a real decline in food prices until the dollar exchange rate stabilizes. And for exchange rate stability, capital of at least $ 20 billion must flow into Lebanon. For this to happen, the conscience of those responsible must be awakened, so that they choose the interest of the nation over their personal interests. The solution lies in political solutions, not at the level of importers and supermarkets.
[ad_2]
