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Lebanon awaits a complex economic and financial destiny. In this context, the financial markets expert, Dan Azzi, warned in an interview with the online newspaper “Al-Anbaa” that the mandatory reserve ratio should be reduced in 2021, even if subsidies are raised, in order to ensure the continuity of the State work, supporting the importation of the basic materials it needs. That government institutions continue working, such as importing fuel for the operation of power plants, and other things. It can also be the trend towards gold after the depletion of reserves in the future, if things continue as they are..
Azzi believed that “Lebanon will have two paths: either continue as the current situation is or move towards the IMF. 3900 pounds instead of the dollar, while the exchange rate on the market today exceeds 8000 pounds, until the completion of deposits.Bank check It will stop and everyone will start operating in cash due to the inability to withdraw money from banks. Additionally, the real estate sector is expected to witness a recession due to the suspension of bank checks.“.
As for Lebanon, in the event that Lebanon decides to pursue a path of serious negotiations with the International Monetary Fund, according to Kazi, “the latter will launch a reform program, distribute the losses fairly and demand the approval of a basket of laws, including heresies, in addition to pushing the recapitalization of banks. The need to establish a social safety net to protect the poor classes and monitor the course of action, and the government will not give more than a thousand or two one billion dollars a year at most, and the goal will not be prosperity, but support for poor families.“.
Regarding the redistribution of losses, Azzi said: “Lebanon is a rich country, but what is required is a fair distribution of losses according to a specific government plan. The state can also invest in your children and their skills, for example by funding student study abroad, provided that students repay their debts to the state in dollars, to increase the percentage of foreign currency“.
As for the payment of public sector salaries, Azzi said, “the government aims to increase the printing of the national currency, but inflation will increase in this case.”“.
On the expected help from the World Bank, Azzi pointed out that “the resigned government is negotiating with the bank, which can help with an estimated amount between $ 100 million and $ 200 to support the poor classes.”“.
Regarding the possibility of a drop in the exchange rate if a government is formed soon, Azzi pointed out that “the price may go down a bit, due to the role played by the psychological factor in this context, as well as the applications electronic companies that publish the exchange rate, but the continuation of the fall is related to the government and the people who will be appointed, in addition to the reform program that will be approved, and the position of Parliament on the matter.
Azzi concluded his speech by noting “the development of diplomatic relations between the Arab countries and Israel, and the rapid movement of the latter in the Emirates, for example at the commercial level, which will negatively affect Lebanon.”“.
