Lebanon is on the cusp of hot elections and lira faces 3 scenarios

As the country enters the phase of electoral silence, the price of the Lebanese pound remains an obsession in the electoral arena, especially since the currency has lost more than 90% of its value since October 2019.

The fall of the lira has led to the impoverishment of a large number of Lebanese, whose monthly salaries are only enough for one or two days at most.

Lebanese are wondering what will happen to the lira against the US dollar on Monday after the election results, as the currency is expected to take 3 possible paths.

Bitter and matter

Economist Nicola Chikani said in an interview with “Sky News Arabia” that what awaits Lebanon after the results of the legislative elections can be described as something bitter and bitter.

He explained that if the central bank does not intervene after the election, “that’s a problem”, when the dollar is expected to jump to new record highs in the parallel market, which can be 35,000 pounds to the dollar. or even 50,000 pounds, which will lead to further deterioration in the price of the pound and inflation.

But if the Banque du Liban intervenes, “then a second problem will arise”, according to the Lebanese expert, because it will have the obligatory reserve funds that cannot be used in order to maintain the rate of the dollar within its limits currently registered in the parallel market, and Sheikhani described this procedure as a “big financial mistake”. .

haggling and pessimism

Sheikhani expressed pessimism about the coming period, saying that “in both cases there is a problem because the balance of payments is negative. Lebanon has not launched an economic plan, but politicians have instead pursued their differences.

Cheikhani said that the US dollar exchange rate today is between 25 and 27 thousand pounds, pointing to “a political agreement that took place to avoid a deterioration of its price before the elections, and the Central Bank of Lebanon has been asked to step in until he pumped dollars into the market, almost $500 million.”

Sheikhani describes the amount as “a very large amount which can be spent to establish a power plant to generate electricity”.

sense of stability

On the other hand, banking risk expert Muhammad Al-Fahili believes that Banque du Liban’s intervention in the market has been reflected in the stability of the dollar’s exchange rate against the lira, expecting that “exchange rate stability” is the trend after the elections.

In an interview with Sky News Arabia, Al-Fahili explains that “the priorities of the Lebanese, as individuals or traders, have differed after the economic crisis that has hit the country since 2019, as they are now looking for how to adapt to the changes imposed by the change in the exchange rate.”

The researcher pointed out that “the stability of the exchange rate creates stability with regard to the determination of the expenditure of the Lebanese”.

But Al-Fahili did not hide his fear that some concerned parties would commercialize the unrest that would arise over the lira after the elections, given the lawsuits that exist between the Association of Banks in Lebanon and the Banque du Liban, in addition to the lawsuit to be filed against the Lebanese state for this purpose.

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