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The agency “Akhbar Al-Youm” wrote:
The stability of the dollar exchange rate reflects the degree of confidence in the Lebanese state, an issue that Lebanon gradually began to lose last September, only to be clearly exacerbated under the government of President Hassan Diab, as the price escaped any control and the depreciation of the national currency, the price of consumer goods more and more doubled and the purchasing power of the country declined. Citizens at their lowest levels …
Consequently, will exchange rate stability be one of the indicators of the confidence that the future government, headed by President-designate Mustafa Adeeb, will inspire? … What is expected of him ?!
Black market
The chief economist of the Byblos Bank Group, Dr. Nassib Ghobril, explained that the stability of the exchange rate in the black market is related to the crisis of confidence, which began years ago but worsened with the government of Prime Minister Diab, by decisions who made or decisions that he was supposed to make but did not make, explaining that the crisis of confidence generated A crisis of liquidity shortage, which in turn generated the multiplicity of the exchange rate of the US dollar in the local market, and consequently, a secondary market or black market has emerged since last September.
In an interview with the agency “Akhbar Al-Youm”, Ghobril explained that restoring confidence is what leads to the injection of liquidity, which in turn pushes the use of the black market down.
Worsening of the crisis
In response to a question, Ghobril indicated that the size of the black market is narrow compared to the real market, but the media clarifies it because it is through it that the dollar can be obtained in cash at any time according to the price that is sold. imposed on whoever is willing to pay it.
He noted that the black market is the result of the crisis of confidence that began in late 2017 and gradually worsened as a result of the executive’s negligence to implement reforms, which coincided with the policies of increasing taxes and burdening the private sector with burdens. additional … in addition to decisions that led to an unprecedented increase in public spending and an increase. The budget deficit and the continuing deficit in the balance of payments, since the Executive Power did not take any measures to curb the deficit.
The banking sector
In the context of talking about this crisis and its repercussions, Ghobril mentioned that last September a campaign was launched against the banking sector (both with commercial banks and with the Bank of Lebanon) to hold it responsible for the crisis, and this campaign it resulted in what is called the “financial rescue project” of the previous government, which assumes the full cost for the banks. Consequently, the depositor and the shareholder of the sector is working on the relics, to avoid that the public sector and the political power assume any responsibility and, therefore, any cost of the crisis.
Real reasons
Gabriel reiterated that the root of the problem is trust, identifying the real causes of the crisis that we are experiencing today, noting: In addition to the displacement of the public sector and the increase in public spending by 150% from 2005 to 2019 without approval budgets in most of these years, and the monopoly and mismanagement of vital sectors of the economy such as electricity, water, telecommunications, transport … and this monopoly has led to failure, for example the citizen pays two electricity bills for bring power two hours a day, three water bills, the highest cost of communications in the Arab world. This parallels mismanagement, lack of transparency, random employment (more than 31,000 between 2014 and 2018), reluctance to combat tax activation, lack of activation of tax collection and the fight against tax evasion. customs.
Restructuring
Regarding the banking sector, Ghobril explained that this sector is part of the economy and suffers the repercussions of the crisis of confidence, like any other sector.
back
In this context, he indicated that the repercussions that affected the banking sector appeared in his general budget, since between September 2019 and June 2020 there was a drop in deposits of $ 28 billion, and the loan portfolio, that is, loans to the private sector, fell by $ 8 billion in the first six months of the year. Current, and $ 18 billion since early 2019.
He continued: These decisions taken by the Executive Power (through successive governments) or those that have taken them reluctantly have led us to this crisis that includes all sectors, including banking linked to all sectors and families.
Ghobril concluded, stressing that the main goal of the next government should be to restore confidence through technical measures.
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