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Iran Press TV

Lebanon's government in crisis talks amid currency plunge

Iran Press TV

Friday, 12 June 2020 2:25 PM

Lebanon's cabinet has held an emergency meeting in the wake of angry protests spurred by a considerable plunge of the national currency, which has made the worst recession in decades.

The country has been facing an economic downturn since last autumn. The Lebanese pound, which has continued to plummet against the US dollar, hit a new low on Thursday, going down about 70 percent from its official rate.

The worst economic turmoil since the 1975-1990 civil war has seen widespread layoffs and pay cuts that have put 45 percent of the population into poverty.

Despite previous efforts to control the currency depreciation, the Lebanese media reported that the currency sold for more than 6,000 per dollar on Friday on the black market, down from 4,000 in recent days. The pound had maintained a fixed rate of 1,500 to the dollar for nearly 30 years.

A new wave of protests erupted across Lebanon on Thursday after protesters took to the streets, setting tires on fire and blocking roads including in the capital Beirut.

Prime Minister Hassan Diab chaired the 'urgent' cabinet meeting on Friday, which was also attended by the Central Bank governor Riad Salame and representatives of the banking association and money changing syndicate, the National News Agency said.

Mahmoud Halawa, head of the money changers union, said the Central Bank had agreed to 'inject' a sufficient amount of dollars into the market for importers and regular citizens in a bid to reverse the decline in the pound's unofficial exchange rate.

After the meeting with Diab and President Michel Aoun, Parliament Speaker Nabih Berri spoke of unnamed measures to bring the exchange rate below 4,000 pounds to the dollar.

Another government meeting is scheduled to be held at the Presidential palace later in the day.

Lebanese protesters on Saturday resumed demonstrations demanding the resignation of the ruling elite over mismanagement of the acute financial crisis as the novel coronavirus pandemic and the resulting lockdown compound the economic hardship gripping the country.

The protesters called for early Parliamentary elections and tougher measures to fight corruption and return the looted state funds.

In April, Lebanese Social Affairs Minister Ramzi Moucharafieh admitted that between 70-75 percent of the country's population now need financial assistance.

The Lebanese Prime Minister said then that Lebanon hopes to secure the International Monetary Fund (IMF)'s aid based on a financial reform plan approved by the government to offset the impact of the crisis.

Diab told reporters after a cabinet session that the plan would be used to launch negotiations via its financial adviser Lazard, a leading financial advisory and asset management firm, to restructure the sovereign debt.

"We will use this (plan)... to apply for an IMF program in light of which there will be negotiations," Diab said.

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