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bankingMay 10, 2022

Lebanese lira feared to see new freefall after elections

Informed political sources have expressed concern that the Lebanese currency could witness a new freefall after the May 15 parliamentary elections.

“The central bank is still intervening to prevent a price deterioration and to keep (the dollar exchange rate) within LBP 25,000 to LBP 30,000, based on a request from some influential officials who want to keep the dollar under control, so that any surge does not affect the choices of voters” in the parliamentary elections, the sources told al-Joumhouria newspaper in remarks published Monday.

“The dollar might return to its uncontrolled surge, which might pave the way for the grand explosion, should the central bank stop intervening to support the lira after elections as expected,” the sources added.

“To prevent this scenario, the government should quickly send the pending reform plans to parliament, including the plan for restructuring the banking sector, before it becomes a caretaker government as of May 21, the date of the expiry of the current parliament’s term,” the sources went on to say.

The sources added that the new parliament should immediately embark on studying and approving the necessary reform laws in order to “ratify the final agreement with the International Monetary Fund.”

“Only that can rein in the collapse and the dollar before the worse happens, seeing as this agreement will pave the way for restoring confidence in Lebanon and its economy,” the sources went on to say.