THREAD ALERT đ¨ the complete collapse.
According to DailyStar, Salameh told the government that the remaining dollar âRequired Reservesâ belong to the depositors and for this reason he is not going to touch them.
[Reality: he depleted 66.1 billion $ while maintaining the peg].
According to DailyStar, Salameh told the government that the remaining dollar âRequired Reservesâ belong to the depositors and for this reason he is not going to touch them.
[Reality: he depleted 66.1 billion $ while maintaining the peg].
The reserve requirement is a central bank regulation that sets the minimum amount of funds that must be held by banks.
Lebanese banks should keep a Required Reserve of 15% of total deposits, in cash, at 0% interest.
Current Required Reserves = 15% x 114b$ deposits = 17.1 bn$
Lebanese banks should keep a Required Reserve of 15% of total deposits, in cash, at 0% interest.
Current Required Reserves = 15% x 114b$ deposits = 17.1 bn$
In Lebanon, reserves are commonly used to provide USD for medicine, healthcare supplies, fuel, wheat, and EDL & maintain the peg.
While one of many purposes of the 'required reserves' is to ensure that banks are able to meet their obligations in case of sudden USD withdrawals.
While one of many purposes of the 'required reserves' is to ensure that banks are able to meet their obligations in case of sudden USD withdrawals.
Existing issue with subsidies:
- Smuggling subsidized products to make a fortune such as smuggling fuel to Syria.
- Merchants taking advantage of these subsidies (mazut) to sell them in Lebanon using black market rates.
- Selling subsidized foodstuff at a really high price.
- Smuggling subsidized products to make a fortune such as smuggling fuel to Syria.
- Merchants taking advantage of these subsidies (mazut) to sell them in Lebanon using black market rates.
- Selling subsidized foodstuff at a really high price.
For how long can BDL keep on subsidizing medicine, fuel, wheat, and EDL?
On April 29, Riad Salameh stated that BDL's reserves are 20.9 billion $.
Assuming his figures are accurate while BDL injects around 700 million $ per month to subsidize.
On April 29, Riad Salameh stated that BDL's reserves are 20.9 billion $.
Assuming his figures are accurate while BDL injects around 700 million $ per month to subsidize.
If BDL doesnât touch the required reserves, they can keep on subsidizing till end October 2020.
Using an optimistic scenario, if BDL continues to use our deposits (which I believe they will), the reserves can last till November 2022, given we donât cover any foreign liability.
Using an optimistic scenario, if BDL continues to use our deposits (which I believe they will), the reserves can last till November 2022, given we donât cover any foreign liability.
âI canât even withdraw USD from my bank account & weâre already witnessing hyperinflation, how does that affect me?â
Well, if the Central Bank wonât be able to provide subsidized USD to cover basic necessities, the price of every single product and service will simply blow.
Well, if the Central Bank wonât be able to provide subsidized USD to cover basic necessities, the price of every single product and service will simply blow.
The following table provides the cost of products if BDL decides to lift its subsidies or wonât be able to cover imports anymore.
- Today, bread will cost10,000 LBP
- MRI scan will cost 1,700,000 LBP
- Electricity bill will reach 371,000 LBP while a kazdoura will cost 75,000
- Today, bread will cost10,000 LBP
- MRI scan will cost 1,700,000 LBP
- Electricity bill will reach 371,000 LBP while a kazdoura will cost 75,000
Dollar will become scarcer, we wonât be able to import fuel, wheat, medicine and other basic necessities.
Shelves will be empty, the Lira value will keep on collapsing as there wonât be any reserves to protect it against speculation attacks.
The Venezuelan Scenario.
Shelves will be empty, the Lira value will keep on collapsing as there wonât be any reserves to protect it against speculation attacks.
The Venezuelan Scenario.
It doesnât end there, NSSF (ŘśŮ
اŮ) wonât have the funds to cover the new prices and cannot collect fees from corporations at the market rate.
Your costly medical bills won't be covered by NSSF, therefore no one will be admitted at hospitals.
We'll also have medicine shortages.
Your costly medical bills won't be covered by NSSF, therefore no one will be admitted at hospitals.
We'll also have medicine shortages.
We must reform or else Lebanon will completely collapse.
We are able to restore economic stability, rebuild our USD reserves which will stabilize the lira.
If we apply the IMF reforms, we will receive funds to cover imports. We have the capabilities to re-launch the economy.
We are able to restore economic stability, rebuild our USD reserves which will stabilize the lira.
If we apply the IMF reforms, we will receive funds to cover imports. We have the capabilities to re-launch the economy.
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