Salama drains the pound from the market: more impoverishment of the population

Salama drains the pound from the market: more impoverishment of the population
Salama drains the pound from the market: more impoverishment of the population

Leah Al-Azzi –

The banks blame the shortage of the Lebanese pound on the Banque du Liban, considering that it does not provide it with the necessary quantities. The Banque du Liban accuses banks of “misting” the cash liras (which it gave them) to buy dollars, instead of handing them over to depositors. And between the two, society once again pays the tax of not recognizing the collapse and restructuring of the banking sector, and Riad Salameh continues the policy of draining cash in pounds from circulation in a random manner.

During the past weeks, the Governor of the Banque du Liban, Riad Salameh, discussed with the Minister of Finance and other political references the imposition of new tariffs for the collection of electricity, water, telephone and taxes bills… to be calculated according to the exchange rate of 3900 pounds per dollar. Simultaneously, he spoke with the President of the Association of Banks, Salim Sfeir, about his intention to convert a third of US dollar deposits into Lebanese pounds, by encouraging depositors to withdraw their deposits and searching for a new price for the platform established under Circular 151 other than the price of 3900 pounds / dollars (“Al-Akhbar” issue of June 30, 2021). ), with the increase in cash in pounds in circulation… which Salameh wants at the same time to fight and reduce it.

Salama realizes that the increase in service prices (which was preceded by the increase in the cost of medicine and fuel) without being accompanied by a wage correction, means reducing the population’s consumption and living capabilities to the maximum, so that their income and savings in pounds are barely enough to cover basic expenses, taking advantage of the banks’ restrictions on withdrawals in pounds, forcing Monthly ceilings, even on salary accounts. That is, it prevents employees, many of whom have only their monthly salary, from getting their money. But Salama only cared about one thing: the further impoverishment of society. The governor of the Central Bank considered that his proposal narrowed the screws on people by raising the value of the services they pay, so that they would not have “excess” Lebanese pounds that they would exchange in the market for US dollars. He tried to market the presence of “large amounts of pounds in homes,” stressing that the cash supply in pounds (according to the latest statistics amounted to 45 billion) has become huge, and he wants to withdraw it from the market.
By the way, the amount of cash in circulation did not rise by itself, it was the safety of its official sponsor. It is a systematic policy that it has adopted since the beginning of the crisis to achieve two goals: to protect banks from bankruptcy and so that their shareholders do not bear responsibility for losses by pumping their own money, and the second goal is to fill part of the gap in the accounts of the Banque du Liban and to suggest that there are no losses in its budget. Therefore, the cost was transferred from the banking and financial sector, which is primarily responsible for the crisis, to be borne by all Lebanese society. Currently, Salameh intends to be more strict in drying up cash in pounds from the market, because, according to his dictionary, it is the only way to control the exchange rate and a proactive measure that precedes adjusting the dollar exchange rate to become 8000 pounds instead of 3900 (as is said among banking circles).

A safety measure led to the fire burning again between him and the drains. The Association of Banks announced in a statement that “the ceiling of cash withdrawals imposed by banks is a result of the Banque du Liban’s reduction of the cash money ceilings that banks can withdraw from the Central Bank according to a quota that has been set for each bank. Therefore, banks cannot give out more than what the Banque du Liban secures, especially since customers initiate withdrawals without any deposits that compensate for the continuous demand for cash. Proceeding from this reality, banks have asked institutions wishing to exceed the ceilings in force within the framework of paying the salaries of their employees to take the initiative to contribute by providing cash, especially if they charge it for their services.
Follow-up sources confirm “there is a shortage of pounds in the banking sector,” and give an example of one of the first-class banks “purchasing monthly, based on checks, between 120 and 150 billion pounds in cash, on which a commission ranging between 12 and 15 percent is paid.” The Banque du Liban has reduced the permissible “quota” for each bank, “and most institutions that collect money in pounds no longer deposit them in the banking sector, either buying dollars with them from the market or using them to pay salaries and operating expenses.” However, Riad Salameh is quoted as saying that in the past months, the banks “lost” large amounts of the lira, which they did not give to depositors, but rather bought dollars with them from the market.
Away from the continuous tightening of ropes between the central bank on the one hand, and the banks on the other hand, the lira was withdrawn from the market arbitrarily and without this being part of an integrated vision, which leads to more suffocation of society. Importers of fuel, medicine and wheat need the “cash” to open credits. Merchants need cash to buy dollars to import goods. The population needs cash to fill up gasoline, go to the supermarket, pay the hospital, the generator owner, and official bills… The entire economy depends on cash to complete its operations. This only happened after the banking sector collapsed and stopped providing customer services, with a central bank governor taking all measures that prevent monetary and economic stability.

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Salama drains pound market impoverishment population

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