The "euphoria" of the elections has faded, giving way to the reality of accumulated crises that seem poised to accompany us until we stabilize our shaky internal situation. The most pressing issue is, of course, the unrestrained dollar. With the conclusion of the electoral process, the dollar has risen again after a relative stability established during the past months to complete the electoral requirements. It has surpassed the threshold of 30,000 Lebanese pounds, with seemingly wide prospects for further increases that cannot be predicted.
There are multiple reasons that bolster the volatility of the greenback, according to economic expert Professor Jassem Ajaka. He outlined these reasons in an interview with MTV in three points: First, there is the political aspect and the uncertainty surrounding the upcoming constitutional requirements, from electing a new Speaker of Parliament to the government formation process, coupled with the absence of any guarantees regarding the speed of the formation, as is usually the case. Second, there is a dollar shortage in the market, alongside rising prices for food and basic goods globally due to inflation and the Russian war in Ukraine. Third, increased demand for the dollar from certain traders and money changers for importation or even for speculation.
Ajaka notes that the dollar shortage in the market and the inadequate capacity for importation fundamentally stems from the fact that we import goods worth 9 billion dollars while exporting only 3 billion dollars, meaning that profits do not wholly return to Lebanon. Consequently, the central bank will not be able to cover this shortage indefinitely.
Regarding the discussion about potentially suspending Circular 161, Ajaka indicates that he was the first to speak about this possibility, as his information suggests that the International Monetary Fund requested that the negotiating team in Prime Minister Najib Mikati's government, in addition to the reforms, refrain from pumping dollars into the markets and allow the dollar to find its level. He points out that what is required today to reach an agreement with the IMF is to implement the necessary reforms and approve the capital control law. Importantly, it is crucial to secure the borders, as the continuous smuggling through our open borders does not serve the necessary path to save our economy.
Cynthia Sarkis - MTV
