On January 29, Lebanon managed to secure a $246 million loan from the World Bank as part of a program aiming to support the poorest families enduring the economic turmoil. Lebanon’s central bank, Banque du Liban (BDL), took the opportunity to suggest the appropriating dollar donations and disbursing instead Lebanese pounds at a so-called “humanitarian” exchange rate of 6,240 LBP to the dollar, an effective 35% haircut. BdL would then use the dollars to continue funding the subsidies program.
LIMS clarified that the loan is far from being the solution to the crises plaguing the country, but rather a timely assistance to people in dire need. However, appropriating the dollars meant for the poorest families is simply wrong. LIMS reiterated that subsidies are a counterproductive policy that inevitably leads to the smuggling, squandering of dollar reserves, and costing around $500 million a month.