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Khaled Abu Shakra wrote in the Nidaa Al-Watan newspaper a report entitled: Living goods are subject to interruptions for “two days” and demand is high in “two currencies”, in which he stated:
The effects of the Banque du Liban’s decision to oblige merchants to pay the required percentage of them in lire in cash, to secure the foreign currencies necessary for the import process, continue to interact. And its last chapter is the possibility of cutting off the fuel and food markets, after we witnessed the threat of stopping the importation of medical equipment.
The Zahrani and Deir Ammar oil facilities have continued to close their doors since last Thursday and have refrained from supplying fuel to traders by decision of the Banque du Liban. Despite the availability of large quantities of petroleum derivatives, and awaiting the arrival of a ship loaded with materials this week, the sudden decision of the Central Committee interrupted the technical work mechanism of the facilities and opened their doors to acts of theft. at gunpoint. All employees had to go on strike and refrain from exercising their work until a method was found to ensure their safety.
In addition to the risk of accumulating approximately 2 billion Syrian pounds in cash a day in the facilities’ funds, which only have a guard at the gate to protect them, the enormous amount of money resulting from the sales operations requires “the presence of a well-equipped staff, the availability of inspection devices and the counting of money, “he says. Member of the station owners union in Lebanon, George Brax “Furthermore, this mechanism makes tanker trucks that have to transport large amounts of money to pay for merchandise a potential target for robbery and theft. This exposes us to great physical and material dangers to which we are indispensable ”.
This reality was quickly followed, according to BRAC, by suggesting a mechanism that allows oil facilities to decipher the exclusive treatment of establishments with the Banque du Liban, as a public institution, and to open accounts for them in commercial banks. In cash, and the latter transfers it to the establishment’s account at the Banque du Liban in the same way, that is, in cash, which has been approved by the Bank of Lebanon.
Solving the complex of establishments in terms of the method of collecting money does not mean that the problem is over, since the problem still lies in the bureaucratic procedures necessary to adopt such a method in public institutions, and find its implementation mechanisms. Until a solution is found, the facilities will remain closed. On the one hand, on the other hand, “requiring importing oil companies to bring banknotes to open import credits at the Banque du Liban, will force us, as terminal owners, to pay the price of the merchandise for them in cash. Consequently, we will be obliged not to accept credit cards or other electronic means of payment from consumers. ” Brax says. “This indicates that the Central Bank makes the decision and opposes it. On the one hand, it encourages electronic payment, and on the other hand it forces us to pay in cash. They are two things that are impossible to combine in these circumstances ”. Furthermore, “their decisions have become similar to the Ottoman decrees,” according to the Braks. “As the last decision came suddenly and without prior knowledge or preparation with the sectors it affects. This caused a state of confusion and loss, and caused many losses ”.
The cry was not limited to the oil sector, but was repeated by the Union of Importers of Medical Supplies. The Banque du Liban refused to accept an amount of 41 million dollars collected from the companies destined for the import and asked them to insure 85 percent of the sums in cash. Despite the inability to secure the amount to reopen loans for old orders, and the union delivered a letter of request to the central bank, the latter rejected the request, prompting the union to ask its clients to pay all their previous obligations. and later in cash at a rate of 85 percent in lira and 15 percent in dollars, otherwise there will be no importation. For medical equipment.
This new reality at the oil and medical level “applied from the beginning to food importers,” according to Hani Bohsali, director of the Lebanese Union of Food Importers. “Resolution No. 66/1 / AT of 05/28/2020 related to the organization of the support process for the food basket in cooperation with the Banque du Liban, and Resolution No. 87/1 / AT, of 7/8 / 2020, according to which the support mechanism Higher consumption staples required importers to ensure 100 percent of the value of the credits allocated for the import of subsidized materials in cash and Lebanese pounds at a price of 3,900 pounds. However, this does not mean, according to Bohsali, that “the repercussions of the recent Banque du Liban decision will not affect the volume and quantity of food imports.” From their point of view, the Central Bank’s decision will create “a vacuum in the markets as a result of the high demand for liquidity in pounds and dollars. This will be reflected in the ability of food importers to ensure the liquidity required for the process. of import “, especially since importers that benefit from the support mechanism do not exceed 20 percent of all importers While around 80 percent of them are forced to buy dollars in the secondary market at 100 percent to meet import requirements. As a result, the entry of importers of oil, drugs and medical supplies as competitors in the aftermarket will create very great pressure, which could expose food safety to vibrations. “
Regardless of the objectives of the Banque du Liban’s decision, whether it is to absorb liquidity in pounds or to force consumers to withdraw money saved at home, it will result in the loss of cash liquidity from the markets, and the exacerbation of the deflation that the country suffers.
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