Lebanon

What Will Happen to the Dollar After the Elections?

What Will Happen to the Dollar After the Elections?

It is expected that the first Tuesday after the significant Sunday will witness several changes, most notably the transition of the government to a caretaker government at the start of the House of Representatives' new term, based on paragraph "e" of Article 69 of the Constitution. Additionally, there may be further looseness in the actions of senior officials. According to some financial experts, the exchange rate of the dollar, which is rising without economic justification, may irresponsibly increase, leaving the current governor of the Central Bank of Lebanon unaccountable while waiting for the new government. However, reaching a consensus for this government is not easy before many matters are settled regarding the presidency of the council and the mechanisms for forming its legislative kitchen.

Political sources following the situation consider it premature to discuss the formation of a government after the parliamentary elections, especially before the completion of this electoral process and understanding its results and the composition of the new parliament, as well as how this composition will interact with the government formation issue. The sources stated that there are attempts to convey the impression that the resolution of the new government's formation lies solely in one person’s hands, as reported about the head of the Free Patriotic Movement, Deputy Gebran Bassil, in his discussions with his party. However, everyone recognizes that this claim is misplaced, and the government formation process requires consultations between various political parties and components of the parliament.

The sources noted that what is happening now is an attempt to preemptively gauge the positions of the parties before moving on to the next step, which involves initiating consultations in preparation for forming the new government. They expressed a consensus among the concerned parties on the necessity of swiftly forming a post-election government to complete the execution of files and commitments made by the current government to the international community. This pertains to achieving a final agreement with the International Monetary Fund or undertaking the required reforms across state institutions, foremost among which are the reforms in the electricity sector. Furthermore, this government may need to collectively assume the responsibilities of President Michel Aoun in governing the state in case the presidential elections are delayed as occurred before General Aoun's election as president, or for any other reason, since the current government cannot undertake such a task while it is resigned and only functioning in a caretaker capacity.

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