Lebanon needs $12-15 bn for economic recovery: BDL chief
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Lebanon's Central Bank Governor Riad Salameh says the LBP to USD rate is unrealistic after the national currency lost around 90% of its value against the US dollar.
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Lebanese central bank governor Riad Salameh
Lebanon requires $12-15 billion to start its process of economic recovery and support its fast-diminishing foreign currency reserves, BDL governor Riad Salameh said Tuesday.
Lebanon is facing an unprecedented economic crisis, which the World Bank ranked among the top 10 worst economic crises in the world since the mid-nineteenth century.
Over 80% of the population lives in poverty, and the national currency, the Lebanese pound, has lost more than 90% of its black market value as Beirut is yet to reach an agreement with the International Monetary Fund amid a political crisis.
"Our quota in the International Monetary Fund is four billion," Salameh said.
"The mandatory reserves are around $12.5 billion," that the central bank can't spend, Salameh said. He also explained that an additional $1.5 billion in reserves had been freed up for central bank spending.
Lebanon's mandatory reserves were $32 billion before the economic crisis started in the country.
The shrinking reserves are threatening a subsidy program that had initially covered fuel, medicine, flour, and numerous other vital imports before they diminished.
BDL can only afford financing partial subsidies on a few remaining key imports for "around 6-9 months" if the government takes no additional measures to combat the depreciation of the national currency, Salameh asserted.
The Lebanese pound was officially pegged at 1,507 pounds per USD since 1997; however, 24 years later, it hit a record low of nearly 30,000 LBP per USD.
The crisis prompted the central bank to gradually lift subsidies on key imports, including medicine, rendering the Lebanese people unable to get their hands on certain medicines, including ones needed for chronic illnesses.
Lebanon's Central Bank governor is being probed in France, Switzerland, and other European countries on suspicion of money laundering and illicit enrichment, among other allegations - cases which he all dismisses as unfounded and lacking in evidence.
