Food prices soar, wages plunge in new Lebanon currency crisis

Lebanon’s dollar supply has also been hit by a currency crisis in Syria. (AP)
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Updated 11 June 2020

Food prices soar, wages plunge in new Lebanon currency crisis

  • Black market money changers send pound to record low of 5,200 to US dollar

BEIRUT: The Lebanese pound plunged to a new low against the US dollar on Wednesday as black market traders defied official attempts to support the currency.

The government and registered money-changers launched a pricing system last week with a gradually reduced rate announced each day with the aim of reaching 3,200 pounds to the dollar.

Under the scheme, money-changers set a buying price of 3,890 on Wednesday, with a selling price of 3,940. But dollars at this rate were unavailable and instead some sellers on the black market were charging up to 5,200 pounds to the dollar.

“We have given clear, decisive instructions to security agencies to be tougher in curbing the chaos in pricing,” Prime Minister Hassan Diab said.

Food prices are soaring and suppliers said it was increasingly difficult to find enough dollars to complete orders. “Looking forward only a few weeks ahead, we may not be able to honor our engagements toward our suppliers,” said Hani Bohsali, general manager of Bohsali Foods, a major food importer.

Lebanon’s money-changing syndicate chief Mahmoud Murad, who was briefly arrested last week accused of currency manipulation but released without charge, told Arab News: “What is happening is surprising and incomprehensible. We do not know the reason behind
this chaos.”

Lebanon’s dollar supply has also been hit by a currency crisis in Syria, where people are buying dollars to protect against inflation and hedge against the effect of impending US sanctions. 

Murad explained that Lebanon and Syria’s exchange rates were intertwined. “They are twins,” he said. “What affects the Lebanese pound affects the Syrian pound, and vice versa. The dollar exchange rate in Syria suddenly jumped to 3,500 pounds before unexpectedly dropping to between 2,600 and 2,700 pounds. We do not know why. Has someone poured US dollars into the Syrian market to cause this drop? Where did these dollars come from? It is strange.”

Murad called for a crackdown on black market money-changers. “We are committed to the syndicate’s daily exchange rate, but we want the black market to be combated the way street riots are being fought or we will close our shops,” he said.

The plunging pound has led to public protests as the value of Lebanon’s minimum monthly wage has dropped from $450 to about $100. “The system controlling the country is committing a major crime by allowing this chaos in the dollar exchange rate. The chaos in the prices of food is another crime,” the General Confederation of Lebanese Workers said.

Dozens of people protested in central Beirut on Wednesday, and activists blocked roads in Tripoli and Bekaa.

Dubai launches economic program for post COVID-19 recovery 

Updated 05 August 2020

Dubai launches economic program for post COVID-19 recovery 

  • “The Great Economic Reset Programme” is part of a “COVID Exit initiative” to help the recovery and reshaping of the economy
  • The economic program will feature analyses of current and future policies

DUBAI: Dubai launched an economic program as part of its efforts to reshape the emirate’s economy for a “sustainable” and “resilient” future post the coronavirus pandemic, the government said. 
The Dubai government partnered with the Mohammed bin Rashid School of Government (MBRSG) to launch “The Great Economic Reset Programme” as part of a “COVID Exit initiative” to help the recovery and reshaping of the economy, state news agency WAM reported on Tuesday. 
The economic program will feature analyses of current and future policies, research and extensive stakeholder consultation to set the direction and tone of future economic policies, regulations and initiatives.
The government plans to use local and international experts for economies and societies to create growth strategies for the Dubai economy.
The MBRSG held a “Virtual Policy Council,” with global experts and thought leaders to discuss the impacts of COVID-19 on the economy and potential policy responses and initiatives. 
Chief economists, senior practitioners and researchers from leading global institutions including the World Bank, joined experts from Dubai Economy and the MBRSG at the first roundtable.
“I believe the triple helix collaboration between public, private and academia stakeholders have always produced the best solutions in the past. In the highly uncertain environment now, extensive collaboration and cooperation between all stakeholders are vital to our future prosperity. The Virtual Policy Council will propose the best approaches Dubai and the UAE can adopt to address the risks and opportunities in the next normal economy,” said Mohammed Shael Al-Saadi, CEO of the Corporate Strategic Affairs sector in Dubai Economy.
“This Virtual Policy Council is a key component of the whole process where global experts and thinkers share their views on the future economy. In this new era, the role of governments in enabling the new economic actors is becoming increasingly central, and Dubai is well-positioned to lead the way with innovative models of growth post COVID19,” said Professor Raed Awamleh, Dean of MBRSG.
The roundtable also discussed the impact of the pandemic on international trade, foreign investment and tourism, as well as the rise of digital globalization.