Lebanon central bank to inject dollars into market: President

Lebanese President Michel Aoun speaks during a TV interview at the presidential palace, in Baabda, east of Beirut, Lebanon, Tuesday, Nov. 12, 2019. (AP)

Lebanon's central bank will begin injecting dollars into the market beginning on Monday in order to strengthen the Lebanese pound, President Michel Aoun said on Friday.

Speaking at the start of a cabinet session, Aoun said huge losses to the financial system should not be borne by depositors but instead by the government, central bank and commercial banks.

The Lebanese pound has seen its value fall quickly in recent days, slipping to about 5,000 to the dollar from about 4,100 a week earlier, sparking protests across the country.

Lebanese parliament speaker Nabih Berri said earlier that the government was aiming to reduce the dollar price to about 3,000-3,200 pounds through steps agreed on Friday, without specifying what they were.

The pound has lost some 70 percent of its value since October, when protests first erupted and the country plunged into a financial crisis that has seen dollars dry up and the economy grind to a halt.

Lebanon’s central bank has tried to rein in the currency's collapse, agreeing last week with money changers to set a unified daily price that would be gradually reduced to 3,200 pounds, but importers have said dollars at this reduced price are unavailable.

The heavily indebted country has maintained an official dollar peg of 1,507.5, but dollars at this level have been rationed exclusively for imports of fuel, medicine, and wheat.

Berri also said there was agreement reached on speaking tothe International Monetary Fund in "one language", amid
disagreement between MPs, the central bank and government officials engaged in talks with the Fund for an economic reform
program.

Beirut is hoping to secure billions of dollars in financing, but the talks have been stalled by internal disagreements over the value of huge losses in the financial system and proposals for how to cover them.

Aoun said on Friday financial sector losses should not be borne by depositors but instead by the government, central bank, and commercial banks.

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Last Update: Friday, 12 June 2020 KSA 18:23 - GMT 15:23
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