(UPDATE) COUNCIL OF MINISTERS CONVENES IN EXTRA-ORDINARY SESSION AT BAABDA PALACE

During an extra- ordinary session held this afternoon at the Baabda Palace  headed by President Michel Aoun, and gathering Prime Minister Dr. Hassan Diab and the ministers, the Council of Ministers adopted measures to reduce raise in the exchange rate of  the Lebanese pound to the UD Dollars. The Central  Bank of Lebanon will start pumping US dollar into the markets starting next Monday.  .

 

President Aoun asserted during the session that what happened “made us wonder whether the Dollar’s raising rate Circulating is a rumor to trigger  people to take to the streets for protests, confrontations and riots ? This drives us to ask if there is a political or banking game or something else worth considering.”

 

He added, “The opposition Protests in the street seemed to be organized and targeting the government, because experts stressed that the high rise in the exchange rate is not justified. “

 

He reveled that the government reassures the public, that exchange rate is expected to decline gradually.

 

For his part, Prime Minister, Diab considered that “the rise in the exchange rate , which caused an uproar in the country, would not only topple a government, but would also sabotage the whole country.”

 

He added:  “The country can no longer tolerate additional shocks. What is demanded is to impose harsh measures that prevent any person or group from  resorting more tension . Practical measures should be imposed to assure greater immunity to the government and the state in confronting such riots.”

 

Following the session, Minister of Information Manal Abdel-Masd addressed reporters:

 

“The cabinet convened in the Baabda Palace this afternoon om a follow up to the session that was held  in the morning in the Grand Saraya. The session was chaired by the President of the Republic in the presence of the Prime Minister and the ministers.

 

At the opening of the session, the President of the Republic tackled what happened yesterday as a result of the mounting exchange rate without any justification, which made us wonder whether the value that was given to the exchange rate is a rumor that was circulated so that people took to the streets to protest and stage riots. What brings us to the question: Is there a political or banking game or something else worth considering?

 

The  President of the Republic added: “The protest seemed to be organized and targeting the government, because experts stressed that the exchange rates were unjustified, which force us to work to confront any hidden plan.”

 

The President of the Republic said: We have adopted a measure that will be implemented next Monday, as the market will be poured with dollars from the Central Bank of Lebanon. The exchange rate will gradually decline.

 

The President of the Republic considered that the responsibility for what happened financially lies on the government, the Central Bank of Lebanon, and the banks.  Consequently, the losses should be the responsibility of  these parties, not depositors.

 

He added: We have inherited a heavy burden, but we will not evade responsibility. The Lebanese should help us to deal with the emerging situation, knowing that we are not responsible for what happened.  We will remain in solidarity  to benefit the Lebanese people.

 

The Prime Minister , pointing out that the afternoon session is the completion of the morning session attended by the Governor of the Bank of Lebanon, the Association of Banks and the Syndicate of Banks. The discussion revolved over the high exchange rate of the dollar against the Lebanese  lira, which caused a strife  in the country, which could topple a government, but also a whole country.

 

The Prime Minister added: The country can no longer tolerate additional shocks. Harsh measures are required to put an end to any person or entity that resorts to producing tension .  Practical measures must be taken to boost the government and the state with more immunity to confront such strives.

 

The Cabinet discussed the financial and monetary situation, and decided the following:

 

1- Assign the Minister of Justice, and in support of Article 14 of the Code of Criminal Procedure, to request the discriminatory Attorney General to follow- the fabricated and false facts and allegations regarding the decline in national currency .The crime stipulated in Chapter One of Book Two of the Penal Code, as a prelude to referring the cases that result from these investigations to the competent judiciary, including the Judicial Council.

 

2- Form a crisis cell headed by the Minister of Finance and membership of the Minister of Economy and Trade, Minister of State for Administrative Development Affairs, Minister of Industry, Minister of Information, Governor of the Central Bank of Lebanon, President of the Association of Banks, President of the Money Exchange Dealers in Lebanon and the Director General of Public Security. The task of the crisis cell is to follow the developments of the financial and monetary conditions and implement decisions, provided that this cell meets in the Ministry of Finance at least twice a week, during which the Governor of the Central  Bank submits a detailed report on these developments and submits a summary of the work periodically to the Prime Minister in preparation for presenting  the matter to the Council of Ministers.

 

3- Ordering the all security agencies to strictly suppress all violations related to the crimes referred to in the first clause above and refer them immediately to the judicial auditor to implement these procedures against violators, especially the confiscation of foreign currencies that prove to be the subject of these crimes.

 

4- The Council of Ministers, after considering what was confirmed by the President of the Money Exchange Syndicate in the morning session regarding commitment to the circular issued by the Governor of the Banque du Liban on 09/06/2020 (b) including the commitment of the Governor of the Central Bank of Lebanon at that session and his adherence  to the terms of insuring immediate pumping of foreign currency (the US dollar) into the local market at a price that gradually to an exchange rate of 3,850 Lebanese pounds for one dollar so that banks and cashiers can sell at a price less than 4,000 LL (C), as confirmed by the governor  in the same session that verifies the cash flows to the accounts in the banks are fresh money sponsored by the circular issued in this regard by the Bank of Lebanon No. 554 dated 11/5/2020,

 

The cabinet emphasized  the importance of the integrity of the cash and will take all measures that would determine due liability in the event of any breaches.

 

Minister of imformation:

 

Q&A

 

Q- What are the measures that will be adopted? and is the government going to dismissal of the Governor of the Banque du Liban ?

 

A- The Cabinet did not wave the dismissal of the Governor of the Banque du Liban. We aimed to eat grapes and not kill the gurd. We are looking at gradual measures, and every time no action is implemented we take another tougher action.  What we have taken today is based on the circular issued by the Governor of the Bank of Lebanon on June 9 and confirmed on June 11, which refers to two types of money changers: authorized and unlicensed.  He has set up a mechanism for money changers authorized to obtain the funds, and today there was a promise to add the amount of the money, and put it at their disposal as of Monday.  In the event of any breach of any obligations by the authorized money changers, the necessary measures will apply against them according to the ruling of the governor, which requires referring the higher banking authority and withdrawing the license.  As for unlicensed money changers, legal, security and judicial measures will be taken, and this is what we discussed in our decisions in the first and third items that talk about strict security, control and judicial measures to put an end to the breach, because the biggest reason for what is going on is the unlawful uncontrollable operations and some abusers.

 

Q- Does the government realize that there are gangs that smuggle the dollar to Syria, and that the dollars that the BDL will pump are among the Lebanese deposits?  What if things got to drain the bank’s reserves and remove subsidies on basic commodities?  Why pressure the Bank of Lebanon to pump currency?

 

A-  We are working to deal with the problem, and of course the issue of pumping the currency is not enough if there is an escape to another place, or if this money goes illegally to other places.  We said that the dollar will be pumped from one side, and on the other hand, illegal operations and abuses will be seized so that we do not leave room for the Lebanese money to go abroad or illegally to other places.  There is also intentional misbehavior by some parties in Lebanon, with the aim of destabilizing monetary stability in the country, which is a crime punishable by the penal code.  So there are a number of measures, and it is not just about pumping the currency.

 

Q- The measures taken are almost the same each time. Why is there not a judicial security police to control the situation?

 

A- This control is the four items of the decision issued today, as security and judicial oversight were dealt with in the first and third items, while the second item included the creation of a crisis cell in solidarity between the government and the Central Bank of Lebanon and all the security and administrative bodies concerned, to follow up the matter and verify the implementation of the procedures that placed. According  to the deliberations in the session and the speech of His Excellency the president about inflating the exchange rate, there is a fear that was created in the country that has grown according to human nature, and I do not think that overnight, the American dollar was requested at this great rate. There is a hypothetical demand that chases the actual demand, and it should be mitigated in favor of the demand made by traders who need the dollar to ensure the continuity of their work.

 

Q- It was said that there are about $20 million in the Central Bank of Lebanon for oil, medicine and flour.  Is there no fear if the bank enters the market, It would be over food and drug security?

 

A- This topic was not the subject of today’s discussion, but rather the measures that must be taken in light of the panic and fear that prevailed yesterday, and reassuring people.  As for the question, the state takes measures and supports specific materials to attract foreign capital in hard currency.  The goal is not to spend from the reserve, but to restore confidence, which does not happen from one night to the next, but it is important to take a step in building the foundations that support a productive economy capable of bringing hard currency to Lebanon.

 

Q- The citizen wants to know exactly what happened yesterday.

 

A- We have been following like you the events that took place, and the security forces have done their part.  I hope the media, and from my position as Minister of Information and I am keen on this sector, to be responsible and play a positive role by not exaggerating some of the negative things that could lead to disastrous results for the country as a whole.

 

Q- Why are responsibilities not distributed so that what happened does not happen again?

 

A- The responsibilities are distributed in parallel and according to the authorities of each side, as evidenced by the arrest of six illegal cashiers, and the matter was followed up during the session.  Therefore, we cannot question any action taken by any party that performs its work. There is a national responsibility for everyone, and we are all part of it, and we are grateful for every effort to serve the country.—Presidency Press Office

Source: National News Agency

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