Economists attribute the remarkable deterioration in the exchange rate, which came in contradiction to the expectations of the Lebanese street, to several reasons, the most important of which are the complex international relations, and the rise in energy and food prices, which added more complexity to the Lebanese economic scene, whose effects will be severely reflected on the citizens, noting that the decline in the value of The lira coincides with the lifting of fuel subsidies, which aggravated the fuel import bill to operate factories and generators for home electricity, amid a chronic shortage of electricity.
Economic researcher Samir Seifan asserts in an interview with “Sky News Arabia” that any collapse in the purchasing power of the Lebanese pound will reflect a further deterioration on the lives of the Lebanese, which have already deteriorated, especially since the fall of 2019, when Lebanese banks prevented depositors from freely disposing of their deposits, to witness this rise. The massive exchange rate, bringing more than 80 percent of the population below the poverty line, and the unemployment rate around 30 percent.
Despite the important significance of the results of the recent elections, and the political optimism they created due to the Hezbollah-led alliance losing the parliamentary majority, its economic repercussions were negative due to fears of political instability and disruption of the work of Parliament and the government, as the Lebanese had previously known this alliance, according to Seifan. He stressed that “these fears lead to a decline in the flow of money in hard currencies to Lebanon and the emigration of deposits from it.”
Seifan added: “It seems that there is a finger-tugging game between the donors and the Lebanese political class that has ruled over the three decades. The donors, whether the International Monetary Fund, which promised to grant Lebanon three billion dollars conditionally, or the European countries who require political and administrative reform, which means reducing the influence of The political class, which in turn insists that it does not budge, makes Lebanon a candidate for more crises.
In turn, Imad Al-Din Al-Musbeh, professor of economics, explained that “the expectations that seemed optimistic about the stability of the Lebanese pound exchange rate, after the legislative elections and the initial agreement with the International Monetary Fund, declined sharply and on file, which raises the question about other factors that were not taken into account, and Lebanon as a meeting point.” Regarding the political, economic and security files, it is affected by any change in these files, and the most important manifestations of its impact is the exchange rate of its currency.
Mosbeh pointed out to “Sky News Arabia” that: “The complex relations that the international scene is witnessing at the present time, and the significant rise in oil and grain prices, especially wheat prices, have increased pressures on the Lebanese economy, because Lebanon is an importer of everything and Iran, which supplies it with money through ( Hezbollah), it seems that it is in an internal security situation that forces it to retreat from providing aid, even if temporarily. Of course, this is added to what we are witnessing from the drumbeat of war as a result of the stalled negotiations on the Iranian nuclear file.
As for the role of the parliamentary elections, which is expected to achieve a breakthrough in the economic scene, Mosbeh pointed out that “these elections did not resolve the matter accurately in favor of any of the parties, despite the positive results in this regard, which opens the political scene to more scenarios that are predominantly It has a pessimistic character, and it contributes to putting pressure on the transfers of Lebanese workers to Lebanon with the rise in the import bill.
And Mosbeh indicated that the Lebanese citizen will suffer sharply from these dramatic changes in the exchange rate, especially if the rate of transfers from abroad continues to decrease and the restrictions imposed by the Central Bank of Lebanon on the amount of money that current account holders are entitled to dispose of.
It is noteworthy that the exchange rate of the Lebanese pound has maintained since the end of the second millennium at the level of 1510 pounds to the dollar, to begin to decline since October of the year 2019, in light of the worst economic collapse in Lebanon, where the market value of the pound lost during this period about 95 percent of its value .
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