Lebanese Central Bank to open unified exchange trading platform
Lebanon will today introduce an exchange trading platform to address the country’s failing economy. The country’s central bank hopes the new platform will increase the rate of the Lebanese pound and stabilise prices by gradually bringing down the price of the US dollar.
Lebanon’s ongoing economic crisis has worsened since former prime minister Saad Hariri resigned in October. The COVID-19 pandemic has exacerbated grievances voiced by protesters—high unemployment, debt, a lack of economic opportunities, and corruption and sectarianism in state institutions—and triggered a new wave of protests this month. The exchange trading platform, introduced in response to the current upheaval will, at best, shortly delay ongoing protests, while failing to address significant structural problems in the economy.
To save the Lebanese economy and the future of his political career, PM Hassan Diab must secure the $10 billion of international aid necessary for recovery. But international assistance is conditional on economic reforms and, although the cabinet authorised a financial reform plan in late April, it fails to adequately address the public sector’s patronage-ridden system. The political elite, particularly those close to Hezbollah, power broker and designated terrorist organization, fear that major economic reform would curb their control over the country’s economic activities. This makes economic reform and therefore, foreign financial aid, unlikely.
In the absence of both reform and international aid, expect Lebanon’s economic crisis to continue, sparking further unrest in the short- to medium-term.
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