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Eva Abi Haidar wrote in Al-Jumhuriya: The Beirut explosion reduced the sale of dollars on the black market from £ 8,000 to £ 8,500 to £ 7,000 to £ 7,500. Will the return of French President Emmanuel Macron to Lebanon and his speech on the preparation of a new international conference to support him reflect a new fall in the price of the dollar against the pound in the next period? Are there maximum limits for the fall or rise of the dollar?
The World Bank estimated the economic damages and losses resulting from the Beirut port explosion at about $ 8.1 billion, and the “International Support Conference for Beirut and the Lebanese People”, which was held after the port explosion, With the participation of 36 countries and international institutions, they pledged to secure some 253 million euros, or about 298 million dollars in relief aid. Immediate, which means that there is a big difference between what Lebanon needs and what it got, not to mention the size of the losses from the financial crisis it has suffered since before the explosion, which Lazar estimates at 186 trillion pounds. Where can Lebanon get these funds from in light of the faltering negotiations with the International Monetary Fund and its inability to achieve a reform step so far?
Informed sources told Al-Gomhoria that if Lebanon gets two billion dollars worth of aid today, a small part will benefit the Lebanese workforce, but most will be diverted abroad for the purpose of importing glass or aluminum, which which means that this aid is not a comfortable factor for the exchange rate. The dollar that entered Lebanon was not invested in projects, but was used to import.
I continued: It is true that rebuilding what has been destroyed moves the economic wheel a little, but what does this movement do in the face of a collapsed and deficient economy? There is an additional economic loss that resulted from the decline in production in various sectors after the port explosion, which according to the World Bank is estimated at about 3.5 billion dollars, in addition to material damage and amounting to 4.6 billion dollars. Consequently, in the face of all these losses, how can the exchange rate improve, and the best evidence is that the price of the dollar in the market has not fallen more than 500 pounds in the recent period despite the support and despite all the help?.
The sources listed some steps that can contribute to the improvement of the exchange rate, including: If a country decides to reform the port at its expense in addition to material support of around 3 to 4 billion dollars, confidence must be restored in the currency, and this restoration does not come if we get the money is only for repair purposes, but if we get support for investment projects in the industrial field or for emerging companies in the technology or information sectors, and if the countries are really Serious about their intention to support Lebanon and establish a second international support conference, their aid should go to investment projects, in these cases. Only the investment dollar will be converted into dollars, the economic wheel will roll with it, and jobs will be secured for the Lebanese..
The dollar is trending up
Regarding the expected direction of the dollar’s movement in the next period, sources say that between the first visit to Macron and the second visit, the dollar moved slightly within the range of 500 pounds, due to financial aid being used to import basic materials needed for reconstruction. Last Friday, the dollar closed at 7,900 pounds, before falling back to 7,300 pounds yesterday, with Macron’s second visit. Consequently, the dollar may fall this time also temporarily, but as soon as it falls back, people rush to buy it and those who own it will refrain from selling it..
But in the event that the government does not rush in its negotiations with the International Monetary Fund to secure financial aid to Lebanon, the dollar crisis will worsen in the next period, attributing it to the fact that the Governor of the Banque du Liban has previously announced repeatedly in the last period that the value of the cash reserves was $ 19.5 billion and we still have $ 2 billion in front of us. To arrive at the mandatory cash reserve, which amounts to 17.5 billion dollars, and these two billion dollars will be enough for about 3 months, since according to the figures, we need about 700 million dollars per month as a price for sustain fuel, wheat and medicines. In the absence of an action plan by the government to face the post-subsidy period, the dollar will not have caps. Once fuel smugglers and drug dealers enter the black market to buy the dollar, their price will soar, because demand on the black market is currently $ 600 million and the dollar price ranges between 7,000 and 7,500 pounds, and if to this figure we add 700 million dollars (the cost of subsidizing wheat, fuel and medicines), then this means The price of the dollar will double more in the next period to exceed 15 thousand, since the need for one thousand and 300 million dollars per month, and this value is not currently available, and therefore this demand cannot be met, which will constitute a real threat to the value of the lira and the sustainability of the availability of consumer goods and capacity . Purchasing. Will the Lebanese be able to buy a wad of bread that will cost more than 10,000, or the price of a can of gasoline, that will exceed 100,000 pounds?
In addition, the sources outlined two scenarios that politicians are expected to resort to after losing control of the dollar exchange rate, and they are: o continue with the subsidy policy until the mandatory reserve is exhausted, that is, buy more time and the reserve in this case is enough for a year and a half..
Either issue a law to reduce the mandatory reserve ratio from 15% to 10% or 5%, and this would lead to a decrease in the depositor’s participation in bank deposits, so whoever has a deposit of 100 million pounds, for example, you will get only 10 million of them..
