“Don’t be fooled” by the rise of the Lebanese pound against the dollar : Economist

LEBANESE-CURRENCY
Lebanon’s currency crashed again on Monday reaching a new low against the dollar, as the country’s financial meltdown and political deadlock linger. The Lebanese pound was trading at around 29,000 to the dollar, losing over 95 percent of what it was worth in late 2019, when Lebanon’s economic and financial crisis erupted.
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Dollar exchange rate could hit 1 million Lebanese pounds, one economist warned earlier this year , do to the absence of any good news for the economy in Lebanon

The dollar is seesawing against the Lebanese pound , the Lira , setting records in a country where politics, the economy and living conditions are fluctuating as well.

But according to economic expert, Louis Hobeika, “Nothing is reassuring, and the Central Bank of Lebanon’s measure of “Aspirin” or “Panadol” does not solve the problem and leads to a temporary decrease or rise of the dollar,” noting that “people are convinced that the Central bank ( Banque du Liban) is trying to improve the value of the pound against the dollar
The economist had this to say on the “ improvement in the exchange rate of the Lebanese Lira against the dollar”: “Do not be fooled .”

In an interview with “Lebanon Debate”, Hobeika said that “the market situation is more psychological than it is an economic one. They ( the citizens ) believe that the Central bank is capable of miracles so as the Lebanese exchange rate against the dollar improves they will sell their dollars, so they will de facto contribute more to reducing its price, this is What is really happening.”

Hobeika advised citizens to only “sell their dollars out of necessity, but selling with the aim of speculation is “madness” in my opinion”. The policy of the Banque du Liban moves the dollar up or down, but the Dollar is expected to rise afterwards .” ?

Hobeika also said that “there may have also been an increase in the supply of the dollar in the market, even without the Bank of Lebanon, by people who recently entered the country , but all of this is temporary and does not lead to a serious and permanent reduction of the value of the dollar.” ?

He added “The fluctuations in the dollar do happen, and I said previously that the dollar will rise , but today it has fallen , but what is the reason? Did anything change in the situation in Lebanon? On the contrary, the situation has been getting from bad to worse . The dollar exchange rate is temporary, and I am convinced that the dollar will not continue to decline because neither the cabinet met, nor the dialogue matings will be held. ?

He stressed that “Lebanon’s problem is not monetary, but rather an organic and financial, political and institutional problem . It is not normal for the dollar to decline.”

And I regret to say: “The dollar will rise soon again , I am absolutely sure the fall in the dollar exchange rate will not continue.”


In addition, Hobeika pointed out that, ” according to our information , prior to elections, money is usually spent in all regions, on parties, aid and conferences and this leads to increase in the supply of dollars . The Lebanese market is very small, and if we ” spend $2 million a day, the. exchange rate will be greatly reflected.

He conclude the interview by stressing” the situation in Lebanon is bad and the dollar is bound to rise again against the Lira

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