The pace of collective impoverishment of the Lebanese people accelerates with each jump of the dollar, causing salaries and wages to diminish rapidly and living costs to rise. Has the dollar broken free from all constraints to continue its alarming upward trend? A comprehensive look at the situation in the country reveals that the writer and economic expert Antoine Ferrah believes it is obvious and natural for the dollar to continue rising as the Lebanese pound collapses. Stopping this trajectory is the surprising and unnatural part, simply because this trajectory aligns with the country's collapsed state, politically, judicially, financially, and economically.
According to Ferrah, the rapid rise of the dollar these days is expected, especially since the Central Bank of Lebanon had intervened occasionally to slow down the rapid collapse of the pound, but it seems to have retreated somewhat recently. Additionally, the large monetary supply of Lebanese pounds that the Central Bank was forced to inject into the market to secure liquidity for the state to cover salaries and public sector assistance is currently being used to pressure the dollar.
When asked whether we will witness consecutive jumps in the dollar as we see today, Ferrah elaborates, saying: "In my estimation, the volume of the monetary supply in Lebanese pounds in the market has nearly reached the size of the dollar supply, which will curb its rise in the coming days, and we will see a temporary 'break' before the dollar rises again."
Ferrah clarifies that temporary measures are not the solution; the fundamental solution is well-known and begins with changing the current scene, followed by organized political action, which in turn leads to economic and financial regulation and a plan to exit the crisis.
Regarding the possibility of the Central Bank intervening as it did in the past to curb the dollar, even if temporarily, Ferrah notes that "the Central Bank no longer possesses many tools for intervention, but it can intervene to a certain extent; however, it is currently allowing the pound and dollar to find their own path in the market based on supply and demand, especially given the tense and inappropriate political and judicial situation for intervention at this time."
If there is a solution for the Lebanese to preserve what remains of their funds amid rapid fluctuations, Ferrah indicates that everyone who holds money in Lebanese pounds has converted it to dollars. No one is keeping large amounts in Lebanese pounds, which itself adds more pressure on the dollar.
Based on this reality, Ferrah believes it is time to seriously consider pricing in dollars, which also protects the consumer. Most importantly, a fundamental solution must be found in the country regarding salaries, linking them to the dollar, even at a lower rate.
