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Lebanon Central Bank to Give Dollars for Food Imports

Lebanon Central Bank to Give Dollars for Food Imports

Thursday, 21 May, 2020 - 10:45
FILE PHOTO: Lebanon's Central Bank Governor Riad Salameh reacts after a news conference at Central Bank in Beirut, Lebanon November 11, 2019. REUTERS/Mohamed Azakir

Lebanon's Central Bank said Thursday it will start providing dollars for food imports as part of "necessary measures" to defend the battered local currency.

The Central Bank statement said its new measures would start next week and commercial banks could take part.

The decision came following talks held on Wednesday between Prime Minister Hassan Diab and Central Bank Governor Riad Salameh.

"I received a promise from the governor ... that the (central) bank will intervene in the market, starting from today, to protect the Lebanese pound and rein in the rise of the dollar exchange rate," Diab said in a

televised speech earlier Thursday.

He also said importing basic foodstuffs would be supported and prices monitored so that Lebanese would soon see a decline in costs.

The Lebanese pound has lost more than half its value since October as the country sinks deeper in its financial crisis.

In separate comments on Thursday, Diab warned the country risked a major food crisis and many Lebanese might soon find it hard to afford bread because of the situation and the fallout of the coronavirus outbreak.

The official pegged rate of 1,507.5 Lebanese pounds to the dollar remains available for imports of wheat, medicine and fuel, while the currency has collapsed on the parallel market.

Banking controls force most importers to get foreign currency on the informal market, where scarce dollars have changed hands at around 4,000 pounds recently.

The Central Bank said last week it aimed to provide dollars for imports at an exchange rate of 3,200 Lebanese pounds to reduce food prices.

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