The political crisis in the country is causing a continued financial and economic collapse, which is resulting in an increase in the exchange rate of the dollar. Strikes are ongoing, with public administration employees and banks participating. The Association of Public Administration Employees has extended their strike and announced sit-ins in various regions. Employees and retirees are demanding conclusive clarifications regarding their salaries, which they receive at the end of the month.
According to sources, the judiciary and political forces must take action to address the situation. While banks do not want to escalate the situation, they may take further action if unfair judicial decisions continue to be issued. Recent statistics show a decline in monetary mass circulating outside of the Central Bank, due to the repeated initiative of the Central Bank to offer the sale of cash dollars through the platform. The suspended budget shows a decline in foreign currency liquid reserves at the Central Bank of Lebanon.
Despite gradually raising the offer price, it is not estimated that the Central Bank will activate the intervention initiative in the coming days, as banks have declared a strike and are not responding to the government’s lack of action to curb specific judicial authorities.
The financial and economic collapse continues, in light of the ongoing political crisis, which is reflected on all levels and all sectors, especially an increase in the exchange rate of the dollar. The strikes continue to paralyze the country and the institutions, most notably the strike of the public administration employees, who announced yesterday the extension of the strike with sit-ins in the regions, as well as the strike of the banks after the general assembly of banks decided not to meet at the end of the week, and to link any meeting leading to the suspension of the strike to violations or new solutions that do not seem to be available currently. .
The Association of Public Administration Employees announced the continuation of the strike for two additional weeks until March 31 (i.e., the Friday after next), while inviting the employees to sit-in and search for escalating steps, pending the results of the next cabinet session, amidst the employees and retirees’ demand that the Ministry of Finance take the initiative to issue conclusive clarifications regarding the arrest. Employees and retirees receive their salaries at the end of the month at any exchange rate, in force, or the exchange rate at the time (above 80,000 Lebanese pounds).
In this context, concerned sources told Al-Diyar that “the ball today is in the court of the judiciary, as well as in the court of the political forces, led by caretaker Prime Minister Najib Mikati. As for the strike, it will continue even if it is suspended for limited periods to manage people’s affairs. And the sources added: “The banks do not want to escalate, and they are not in the process of stopping work with the ATM now or closing the branches completely, but the positivity must be met with quick steps by those concerned, otherwise all options will become available, in the event that unfair judicial decisions continue to be issued.”
And “Al-Sharq Al-Awsat” wrote: According to the latest completed statistics that were followed by “Al-Sharq Al-Awsat”, it was noted that the volume of monetary mass circulating outside the Central Bank actually shrank to about 68.8 trillion pounds in the middle of this month, compared to about 83.3 trillion pounds at the end of last month.
And this is due to the repeated initiative of the Central Bank to offer the sale of cash dollars through the platform, and within available quotas amounting to a swap of up to one billion pounds for individuals and 10 billion pounds for companies.
Likewise, the suspended budget in the middle of this month shows a decline in foreign currency liquid reserves at the Central Bank of Lebanon by about $260 million within half a month, bringing the balance below the level of $9.5 billion, due to intervention in the currency market and meeting some state expenses. Thus, the value of foreign assets declined, on an annual basis, by 12.72 percent, or $2.11 billion, compared to the level it was in mid-March of last year.
Although it was forced to gradually raise the offer price by 10 thousand pounds, bringing the exchange rate of the dollar on the platform to 80.2 thousand pounds by the end of this week, it is not estimated, according to relevant and follow-up banking sources, that the Central Bank will activate the intervention initiative in the coming days, as long as it continues. The banks implemented their declared strike, which they strengthened adherence to due to the lack of response from the government and the authorities concerned with curbing the unbridledness of specific judicial authorities to pursue them and issue new decisions against them that classify them as “discretionary and arbitrary.”
In conclusion, the financial and economic crisis in Lebanon continues to spiral out of control as the political turmoil deepens. The strikes by public administration employees and banks only contribute to the already dire situation, with no end in sight. With the strike extension and the demand for clarity from the government, it seems like the ball is in the court of the judiciary and the political forces. The declining volume of monetary mass circulating outside the Central Bank and foreign currency liquid reserves only add to the already bleak outlook. The Central Bank’s initiative to offer the sale of cash dollars and the gradual increase in the offer price fail to provide a long-term solution to the crisis. The people of Lebanon continue to suffer, with instability and uncertainty looming large. It remains to be seen how the situation will evolve in the coming days and weeks.