Dozens of angry Lebanese took to the streets to denounce the pound’s depreciation and ‘difficult living conditions’.
Lebanon’s parliament on Wednesday approved cash payments for families struggling financially, a move that will cost $556m a year and could allow the lifting of a $6bn subsidy programme for basic goods.
Every family eligible for the programme would receive around $93 a month, a source close to the government told Reuters news agency.
The Middle Eastern nation is in the throes of a burgeoning financial crisis, which has plunged more than half of its people into poverty and which leaves households struggling to afford basic goods.
Lebanon’s currency has lost more than 90 percent of its value since October 2019.
Frustration and anger continue to spill into the streets, with anti-government protests and demonstrations sweeping the nation. Critics say the government has failed to offer a credible financial solution that could unlock billions of dollars in international aid.
The World Bank warned earlier this month that Lebanon’s economic crisis could rank as one of the top three worst the world has seen over the past 150 years.
Shortages of critical items including medicine and fuel have worsened in the past month as the central bank has run short of funds to finance the programme.
And Lebanon’s energy ministry dealt a serious blow to already besieged pocketbooks on Tuesday by raising fuel prices by more than 35 percent.
The price hikes will pile even more pressure on Lebanese consumers both at the pumps and elsewhere. Long queues for fuel have turned violent in recent days as the frustration grows.
And some hospitals are postponing elective surgeries to save on vital medical supplies such as anaesthetics.
Lebanon’s central bank has requested the government give it the legal green light to dip into mandatory reserves. The request is a sign that the bank has all but run out of its foreign reserves.
Mandatory reserves – hard currency deposits parked by local lenders at the central bank – are a percentage of customer deposits and are usually not accessed unless exceptional circumstances call for it.
Lebanon’s parliament instructed the government to issue an approval for exceptional credit to finance the cash subsidy programme.
The move indicates that this would be funded through the central bank’s mandatory reserves, a member of parliament told Reuters news agency.
The United Nations has warned that lifting subsidies could cause a “social catastrophe”, given the lack of government services and financial assistance to help struggling Lebanese.