Billions of the market were withdrawn from the market and another was lost … the Lebanese lira is in front of a new danger?

A report issued by the Bank of Lebanon on the position of banknotes and metal papers revealed that the number of banknotes in the Lebanese pounds within one year reached 96,730,000 papers, with a total value of 9,632,462,134,000 pounds. On the other hand, the value of the packed papers from trading – which differs from the damage – was recorded about 9,779,252,134,000 pounds.

Commenting on these data, economic journalist Khaled Abu Shakra explained in an interview with “Libanon Deepite”, that what was stated in the report is a periodic measure by the Bank of Lebanon, as it works regularly to destroy worn papers as a result of consumption, and replace them with new papers from different groups, which currently range between 5,000 and 100,000 pounds.

Abu Shakra said that the value of the costs, which exceeded 9.6 thousand billion pounds – that is, approximately 107 million and 625 thousand dollars – is not a sudden number, especially in the absence of accurate statistics on the size of the destruction in the past years, considering that it remains within the natural framework of cash replacement operations.

As for the papers withdrawn from trading, which are approximately 9.8 thousand billion pounds – equivalent to about 109 million dollars – Abu Shakra confirmed that it “falls within the monetary policy adopted by the Bank of Lebanon, aimed at withdrawing the lirat from the market in exchange for pumping DollarIn an attempt to reduce the rise in the monetary mass in the lira, as it is one of the main factors that affect the dollar exchange rate on the black market. ”

He said: “The higher the monetary bloc in the Lebanese pounds, the greater the possibility of speculation in the exchange market, so the Bank of Lebanon seeks to reduce this bloc and pump the dollar when needed, in order to maintain a kind of relative stability in the exchange rate, which remained for a period at the limits of 89,500 pounds per dollar.”

He pointed out that these steps are part of a strict monetary policy, especially in light of the high monetary bloc and demand deposits in recent times, which today estimates more than 80 thousand billion pounds, equivalent to about 800 million dollars.

He pointed out that these figures remain modest compared to the precautions of the Bank of Lebanon from foreign currencies, which are estimated at $ 11.4 billion, or compared to the monetary bloc against the state’s assets, which maintains about 7.4 billion dollars in its accounts with the central bank (most of them in lira), but it does not use it in current or investment spending.

Abu Shakra concluded, noting that the state depends on financing any new expenses on new revenues, without prejudice to the money frozen with the Bank of Lebanon, with the aim of maintaining the minimum cash balance. In this context, he cited what happened in the file of increasing the salaries of the military, or in an attempt to impose a tax on Fuel – Which the State Shura Council later invalidated for its constitutionality – as indicators on this financial policy, where the state prefers refraining from spending from its accusative funds, and instead depends on new sources of financing to preserve, even partially, on monetary stability.

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