(1 Oct 2019) LEAD IN: Lebanon's Central Bank has taken steps to ease the demand for dollars amid a worsening economic crisis in the country.
While some Lebanese people have been rushing to exchange cash, others have little faith the directive will effect any change.
STORY-LINE:
Lebanon's dollar-reliant currency is losing value for the first time in more than two decades.
The country's central bank has issued guarantees to secure US dollars for local banks at the fixed official rate.
The move aims to secure imports of fuel, wheat and medicine, and ease the demand for dollars amid a worsening economic crisis.
The the imports would be "only for local consumption."
Many Lebanese people have been rushing to exchange shops in recent days to convert their local currency into dollars.
Last week, $1 could be purchased for 1,650 Lebanese pounds at exchange shops, after the currency had been stable at 1,500 to the dollar since 1997.
Although the official price is still pegged at 1,500 pounds to the dollar, people find it difficult to get hard currency at this rate from local banks.
"The guarantees (of the Central Bank of Lebanon) are to secure the liquidity in dollars to the banks so its clients will be able to import the three commodities (fuel, wheat and medicine)," says Nassib Ghobril, the chief economist of Byblos bank.
"This will ease the market and will pump liquidity in American dollars and will prevent the exploitation by some parties outside the banking sector who have tried to play with the rate of the dollar exchange," he adds.
"The big problem and the big challenge is the issue of increasing trust because rushing to get the dollars from the market was due to mistrust," he continues.
Ghobril says that the 2019 annual budget did not meet expectations.
"We saw a focus on taxes and a lack of seriousness in decreasing expenses," he says.
He hopes next year's annual budget will send a "positive shock" through the economy, "through radical measures and deep reforms."
It is the first day of the month and people are rushing to the ATMs to collect their wages.
Lebanese citizens, like hotel and restaurant owner Adnan Sarieddine, are pessimistic about the central bank's guarantees.
"We do not believe any of them (Lebanese officials) frankly," he says.
"He (the governor of the Lebanese Central bank) is talking a lot and nothing has happened," he continues.
"A country like Lebanon has had no electricity since 1990, the streets are full of rubbish, people are not able to be admitted to hospital, people are dying of starvation - it is shameful - this is Lebanon, the country of civilisations."
"It is all lies and if it will work, it will be for few days or a month then it will be back as it was," says employee Naji Karam.
Karam and Sarieddine are far from the only ones to express their discontent.
On Sunday, hundreds of Lebanese civil society activists and others protested over the economic crisis, blaming their leaders for decades of mismanagement and corruption that led to the crisis.
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