BDLs Acting Governors announcement: Implications of suspending Central Banks tap in Lebanon

BDLs Acting Governors announcement: Implications of suspending Central Banks tap in Lebanon

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2023-09-04 | 10:30

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BDL's Acting Governor's announcement: Implications of suspending 'Central Bank's tap' in Lebanon

What the Acting Banque du Liban (BDL) Governor informed the Caretaker Prime Minister, he confirmed publicly on Monday. 

What does the suspension of the "Central Bank's tap" mean, even if the government resorts to Parliament to legislate spending from BDL's reserves?

This means that the process of swapping the Lebanese lira for the US dollar will stop, and consequently, the Central Bank will cease:

- Providing salaries and wages of public sector employees, military, and security personnel, which amount to $85 million monthly, will not be secured by the Central Bank after September.

- Any remaining support for chronic disease medications, costing $35 million, will no longer be provided by the Central Bank.

- Wheat subsidies, costing $15 million, will be halted entirely.

- The operational expenses of security force administrations, which amount to around $25 million, will also stop, in addition to the state's operational expenses, totaling $40 million monthly.

Furthermore, the Central Bank will also cease paying $60 million, the cost of providing five hours of electricity supply to the Ministry of Energy and the Électricité du Liban (EDL).

The state will not receive $200 million from the Central Bank, and the