Lebanon’s central bank said it will not consume its foreign currency bonds to cover the cost of subsidized medical goods.
Lebanon’s central bank said on Thursday that a system for importing subsidized medical goods could not be maintained without using its required reserves and called on the competent authorities to find a solution to the problem.
Lebanon, which is in the midst of a financial crisis that threatens its stability, has been subsidizing fuel, wheat, medicines and other commodities since last year.
In a statement issued after interim health minister Hamad Hasan said he had visited the bank asking for freedom of funds for essential medicines without success, the central bank – also known as the Banque du Liban – said it would not enter the its required reserves to cover the $ 1.3 billion cost of subsidized medical supplies.
“This total cost required of the central bank as a result of a subsidy policy of these medical items cannot be supplied without touching the required reserves and this is what the central bank board denies,” the statement said. .
Lebanon’s foreign exchange reserves have fallen alarmingly, from $ 30 billion before the financial crisis reached the end of 2019 to just over $ 15 million in March.
The largest grant program costs about $ 6 billion a year.
Hasan had said on a local TV show last week that about 50 percent of the necessary medicines were available, but in the warehouses of importers waiting for payment.
Lebanon, which is in political paralysis, deeply indebted and struggling to raise funds from potential donor states and institutions, has said the money for grants will run out in May.
Trade and consumers have criticized the design and implementation of its subsidy system, which included long lists of non-core items.