Dr. Fouad Zamkahel – Republic
The question that comes to mind of all Lebanese, including international institutions, is the direct and indirect link with the exchange rate, and the process of agreement on maritime borders. Is there a link between the two?
Economically, the exchange rate is linked to various technical, financial, investment and economic factors. In Lebanon, these apparent factors represent the apparent crack in the “iceberg”. But the biggest and most hidden part of the “Iceberg” are the factors, the political agreements, the hidden interventions, the destructive black hands and the illusory promises.
The exchange rate is linked to investments and the flow of money, in hard currencies (the dollar and the euro) .The process of agreement on maritime borders, today is nothing more than some positive intentions, but direct and indirect investments do not they will do it before the medium and long term. As for the return on the sale of our oil wealth, it will take several years of stability, good governance and international agreements.
We also emphasize that the foreign exchange market is mainly related to internal investments, especially external ones, which attract and pump liquidity in hard currencies into the local market. But investor confidence is still very timid and cautious. No big short-term investments, in a climate of political challenge and uncertainty.
We also remember that the exchange rate is also linked to the exchange rate of liquidity, and to the sale of dollars instead of hiding them “under the tile”. Even today, holders of a few dollars prefer to stick to their black day, and the speed of movement and transfer of money is still timid and in extreme cases.
The main pillar of the depreciation of the exchange is still a factor of confidence. Confidence today, even after demarcation, is still lost, because the devil is in the details, especially with regards to enforcement and prosecution, as the two have been missing in Lebanon for decades. We remember with pain that Lebanese politicians have distinguished themselves and are internationally known as heroes of waste and corruption, as well as champions of missed opportunities.
There are many questions and fears that will once again miss this latest looming opportunity.
As for the main point, in our local market, it is that the foreign exchange market is not linked to any official platform, nor to any monitoring, nor to any internal or external audit, but is linked to telephone platforms, the management of which is unknown, and the exchange rate is at the mercy of the dark hands and the black market without any technical and monetary controls and regulations.
The clear evidence of this is that when Circular 161 was enforced and liquidity was injected with dollars, the market price went up instead of down. Then it fell for a few hours after a political agreement before the parliamentary elections. In a second example, in the summer of 2022, we received more than 1.8 million tourists of Lebanese origin on Lebanese soil, who spent and pumped about $ 4 billion into the local market. Here, too, the dollar price has fictitiously risen instead of technically declining.
This clearly and realistically means that the dollar exchange rate in the local market is manipulated by hidden black hands and some banking whales.
In summary, the trust factor is the main pillar before any consideration.There is no doubt that the demarcation agreement can be a door to an economic and financial turnaround, but to translate this optimism into an injection of liquidity and a decrease in the exchange rate, this opportunity must be transformed into a realistic project, implemented and pursued and its returns serve the people and the economy, not the parties and politicians. After the demarcation agreement, we hope that there will be an internal agreement for the real benefit of our natural resources.
