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bankingNovember 10, 2020

Bohsali: Lowering Lira Withdrawals Cap Threatens Food Security

The central bank and commercial banks’ decision to lower the caps on withdrawals in Lebanese lira has “dangerous repercussions on food security” in the country, a syndicate chief warned on Monday.

“This measure will slash foodstuffs imports by more than half of the current volume due to the scarcity of lira liquidity, which represents the only tool at this moment to provide foreign currency liquidity to fund the importing of both subsidized and non-subsidizes foodstuffs,” said Hani Bohsali, the head of the Syndicate of Importers of Foodstuff, Consumer Products & Drinks.

He noted that around 50% of consumers’ supermarket purchases take place through debit and credit cards, whereas the central bank has specified that only cash can be used to obtain dollars from the central bank and the parallel market for the import of foodstuffs.

“This means that with every commercial cycle, importers will lose half of their purchasing power (volume of liquidity that they can use),” Bohsali said.

“The course is clear: we either enable importers to withdraw their money in Lebanese lira or else we will reach a stage marred by a severe shortage of foodstuffs, which would jeopardize the food security of the Lebanese,” he warned.