A dollar for 6 thousand?

Under the heading “IMF adopts the price of 6000 pounds per dollar”, Muhammad Wahba wrote in the newspaper “Al Akhbar”: “In the statistics recently released by the International Monetary Fund, it was found that the gross domestic product fell from 52.5 $ 1 billion to $ 18.7 billion, which means that only 35.6% of production remains from what it was a year ago.This significant contraction of 64.3% is due to two things: the contraction of economic activity and the recalculation of the dollar exchange rate based on the market price and not based on the rate approved by the Bank of Lebanon.

Apart from the technical calculations that imply a margin of error, the exchange rate according to the International Monetary Fund is now equal to 6000 Syrian Pounds, which is very remarkable, especially since the World Bank has not yet approved these figures, and it interesting is that the adoption by the Fund of this number means that the liberalization of the rate The exchange rate will not be at a lower level, and that this will affect the general accounts related to the losses incurred by the banking system, its assets also , and the private sector and its debts … This rate can also be calculated after the exchange rate has stabilized at high levels for months.
Consequently, marginal increases or decreases in price will only have a circumstantial and immediate effect. But you should not risk it and bet that this price is final, since the issues are linked to economic and political evolution. So far, there are no clear blueprints on how to get rid of losses and restart the economy, not for the president appointed to form the government, or for anyone else. There are also no clear economic indicators in a positive direction. The prevailing belief that the equilibrium between the lira and the dollar’s money supply in the market is sufficient to restore the equilibrium of the price imbalance, which is wrong. The supply and demand criteria are not only related to the size of the blocks and their balances, but are also affected by what is possible with each step and each political and economic decision.
Setting the price of the national currency is not so easy. Currently, the price is controlled by a group of speculators and a basket of unrealistic expectations that raise the price according to the interests of the market. Precisely here are these balances. What interest are you investing in and what price do you need to absorb or release cash? There are many questions, but the only available answer is that the Banque du Liban is no longer the market maker as it is supposed to be if it is to preserve “some stability” of the exchange rate. “To read the full article press Here.