Lebanon Daily News Brief 02/24/2022
BDL Extends Foreign Exchange Authorizations To Money Transfer Companies Pending Criteria
Following the Central Bank’s Circular 614 from Monday, all money transfer companies operating in Lebanon that meet certain criteria will now be able to facilitate foreign exchange operations at the request of their customers and with funds received from abroad, which was only previously extended to OMT, the representative of the Western Union network in Lebanon. Among the criteria that local money transfer companies must comply with by June 30, 2022 is the 500 million Lebanese Lira capital requirement as well as the requirement that transfer companies have a record of $50 million USD in inflows flowing into Lebanon in the year prior to its application for a license. The currencies purchased through this process will then be expected to be resold to BDL exclusively. [L’Orient Today]
Future Movement Official: No IMF Deal, Worse Situation Ahead
As reported by Naharnet, an unspecified ‘senior official’ in the Future Movement said, “What we know is that there will be no solutions. There will be neither an agreement with the International Monetary Fund nor solutions in the coming days and months,” adding, “From the Presidency camp’s conflicts with each of the central bank governor and the director general of the Internal Security Forces, it is clear that things are headed for further problems and to a worse situation.” [Naharnet]
Draft Budget Sent to President Aoun
According to L’Orient Today, “During the cabinet meeting at the Grand Serail, Finance Minister Yousef Khalil presented the draft budget for 2022, which Prime Minister Najib Mikati signed today and sent to President Michel Aoun for his signature. When he does, it will be sent to Parliament, where it is expected to be discussed next week.” [L’Orient Today]
OPINION & ANALYSIS
Lebanon, The IMF, And The Parliamentary Elections – What’s The Story?
AbiNader writes, “The IMF identified five main areas of achievable, short- and medium-term measures that would provide a framework for future reforms. According to Byblos Bank, this includes ‘reforming state-owned enterprises starting with the energy sector and improve delivery services without additional public financing [subsidies]; enhancing transparency and accountability by strengthening the governance, anti-corruption, and the anti-money laundering, and combating financing of terrorism frameworks; reforming public finances to ensure debt sustainability and to provide space for social spending and reconstruction; restructure the financial sector to restore confidence and support the recovery; as well as establishing a credible monetary and exchange rate system.’ The IMF had other recommendations regarding the sequence of reforms suggesting that the government move immediately on energy sector and public procurement laws and take steps to build credibility with the Lebanese people as well as international donors. The approval of a proactive 2022 national budget will send a strong signal that the government intends to move in the right direction as the bottom line remains the same: it’s up to the Lebanese Parliament and political leadership to take the necessary first steps on the pathway of reform.”
Carnegie Endowment for International Peace, Sada Journal
Lebanon’s Looming Election Disaster
Noe writes, “There is, fortunately, still a limited window to reverse course. The first step, however, needs to come from those within Lebanon who say that they want change. Today, professed anti-establishment individuals, parties, and movements are fractious; these actors should unify at least in demanding that the current government immediately implements several small-scale but crucial reforms to ensure a free and fair election. First and foremost, these demands should call for a strong, well-funded Supervisory Commission to monitor campaigning, potential intimidation, as well as the vote count itself. In order to ensure that political parties can’t track voters, an array of well-known administrative mechanisms should also be put in place, including limiting the number of ballot boxes at any one polling station (which makes it harder for parties to know how someone voted) and creating “megacenters” for people to vote near to where they live, rather than in faraway villages where their families originate from.”
Lebanese Wary Of Rise Of Customs Duties Amid Economic Crisis
Hamdan writes, “The customs dollar is the price for calculating the customs value of imports, and it is paid in Lebanese pounds. Its price was fixed according to the official exchange rate at 1,515 against the US dollar. Amid the freefall of the local currency value since October 2019 and the emergence of multiple dollar exchange rates, talks about amending the exchange rate of the customs value have made headlines. Immediately after approving the state budget, Prime Minister Najib Mikati said in a statement that the customs dollar will be applied when the budget is ratified in parliament. He noted that the exchange rate of customs transactions for imports will be set by the central bank’s foreign exchange platform, known as Sayrafa, and will be announced by the minister of finance on a monthly basis.”
Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.