Central bank’s plan to let Lebanese dollar depositors raise funds risks fuelling further inflation, IMF says

SourceThe National
SectorFinancial Services
CountryLebanon

The International Monetary Fund said the Lebanese central bank’s decision to allow dollar depositors to withdraw funds partly in the US currency risks fanning prices.

Gerry Rice, spokesman for the Washington-based fund, said it wasn’t clear how the withdrawals would be financed given the scarcity of foreign currency amid the country’s economic crisis and the need to continue financing imports of goods and services.

“There is also a serious risk that the amount of liras in circulation would increase further from already pretty high growth rates, thus adding both to inflationary pressures, and to the depreciation of the lira, which would be highly detrimental

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