- Title: 'Show me the money'; dollar-hungry businesses squeezed in Lebanon
- Date: 19th September 2019
- Summary: BEIRUT, LEBANON (SEPTEMBER 18, 2019) (REUTERS) EXTERIOR OF PETROL STATION WHOSE WORKERS ARE ON STRIKE METAL BARRICADE / EMPLOYEES ON STRIKE VARIOUS OF STATION WITH WORKERS ON STRIKE VARIOUS OF PUMPS (SOUNDBITE) (Arabic) PETROL STATION OWNER, JAMAL BAZAZO, SAYING: ''The strike is because of the absence of the dollar exchange according to the rate that is stipulated by the state which is 1,507.5 liras (to the dollar). We are getting it from the money exchange shops, if it is even available, for the rate of 1,560 (liras). The state has a set price in liras for petrol based on the official dollar rate, the dollar exchange rate is for 1,560 liras (not 1,507.5), we are losing huge sums of money every day that is in the event that we find dollar in the market, sometime it is difficult to get dollars." TRAFFIC OUTSIDE PETROL STATION VARIOUS OF PETROL STATION AND ITS WORKERS (SOUNDBITE) (Arabic) PETROL STATION WORKER, AMMAR, SAYING: "We are selling the petrol with Lebanese liras, and we are buying the petrol in dollars. The companies are exchanging the dollar for a higher rate than the rate specified by the Central Bank, so the difference in the exchange rates is huge. We are now keeping to the rules of the union and all the other stations because of the difference in exchange rate." JIYEH, LEBANON (RECENT) (REUTERS) PETROL TANKER ARRIVING AT STATION LIQUID POURING OUT VARIOUS OF WORKER MOVING AND CONNECTING PIPES TANKER BACKING UP AT STATION TANKER BEING FILLED UP WITH PETROL PETROL STATION COUNTER PETROL STATION WORKER COUNTING LEBANESE CURRENCY VEHICLES WAITING IN LINE TO FILL UP / WORKER CLEANING CAR VARIOUS OF WORKER FILLING UP JERRY CANS VARIOUS OF WORKERS RECEIVING CASH IN LIRAS FROM CUSTOMERS CARS DRIVING OUT BEIRUT, LEBANON (SEPTEMBER 18, 2019) (REUTERS) VARIOUS OF EXTERIOR OF MONEY EXCHANGE SHOP IN HAMRA MONEY EXCHANGER COUNTING DOLLARS (SOUNDBITE) (Arabic) MONEY EXCHANGE SHOP OWNER, MOHAMAD HALABI, SAYING: "People are striking because there is no dollar because the Central Bank is not giving the banks dollars and so the banks are not giving it to customers. When the dollar is back in the market, we will go back to selling it normally." DOLLAR NOTES BEING COUNTED VARIOUS OF MONEY BEING COUNTED IN MACHINE (SOUNDBITE) (Arabic) MONEY EXCHANGE SHOP OWNER, MOHAMAD HALABI, SAYING: "For sure this leads to a shrinkage in the volume of dollar currency being exchanged in the market, anyone who has even 1,000 dollars, not $10,000 or $3,000, they are holding on it waiting to see what the situation will be before they spend it or use it normally." VARIOUS OF TRAFFIC SHOP OWNER SMOKING SHISHA PIPE OUTSIDE SHOP STREET (SOUNDBITE) (Arabic) JEWELLERY SHOP OWNER, KHALED AL MALLA, SAYING: "The economic situation. There is no work, look at me, I am smoking shisha. Nothing, there is no one, very little work. The country, we are not sure what the situation is. Today there was a strike at the petrol stations. We do not know where we are going. God help us. People are broke. They don't have money."
- Embargoed: 3rd October 2019 17:05
- Keywords: Lebanese economy Lebanese markets dollars in Lebanon exchange rate in Lebanon Lebanese lira Lebanese pound
- Location: BEIRUT AND JIYEH, LEBANON
- City: BEIRUT AND JIYEH, LEBANON
- Country: Lebanon
- Topics: Economic Events
- Reuters ID: LVA001AXBOBPX
- Aspect Ratio: 16:9
- Story Text:Cars line up to fill their tanks but the worker at the gas station in Lebanon's capital city waves them off, pointing at the 'Strike!' signs. "No fuel today," he shouts.
The day of industrial action, replicated at petrol pumps across the country, was not really about fuel, it was about the dollars needed to pay for it, or rather the lack of them.
A stagnant local economy and a slowdown in cash injections from Lebanese abroad has reduced the central bank's foreign currency reserves, making it difficult for businesses to buy the dollars they need from banks.
Some are being forced to go to money exchange houses which charge rates above the official peg of 1,507.5 pounds to the dollar.
Lebanon has not seen such financial strains since its 1975-1990 civil war.
The steady pressure has raised concerns for the stability of a country with crumbling infrastructure where political tensions - local and regional - are never far from the surface, and which hosts around a million Syrian refugees.
Banks in the Middle Eastern state still sell dollars at the official exchange rate but some business owners say they are not able to get the quantities they need from them.
Saddled with one of the world's heaviest public debt burdens at 150 percent of annual gross domestic product, Lebanon's government declared an economic emergency last month to try and get its finances under control.
"The economic situation is tough but we are not a collapsing country at the financial level," Finance Minister Ali Hassan Khalil told a news conference this week.
"Yes, there is not much liquidity in foreign currencies in people's hands in the market, but the dollar exchange rate is still maintained in the banks."
The Lebanese pound has been pegged at its current level against the U.S. dollar for more than two decades and the government has pledged to keep it there. It wants to avoid a devaluation that could hurt people's savings and spending power.
And amid anaemic economic growth and political instability, traditional sources of foreign exchange including tourism, real estate and money sent home by citizens abroad have slowed.
Both dollars and pounds are legal tender in Lebanon, which is a net importer of goods with a persistent need for dollars to fund trade and government deficits.
Amid the demand for dollars, some money exchange houses have raised the amount of Lebanese pounds required to buy dollars beyond the margins set by the central bank.
(Production: Issam Abdallah, Imad Creidi, Yara Abi Nader, Ayat Basma) - Copyright Holder: REUTERS
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