The sources indicate that Mikati conveyed his request to Acting Governor Waseem Mansouri in a meeting held just before the Central Bank’s session, but the council did not approve it due to the difficulty of collecting such a large amount from the market in the upcoming period.
Consequently, the depletion of this amount obligates the Central Bank of Lebanon, in the context of securing the government’s foreign currency needs, to collect dollars from the market, which means purchasing them from the market.
This presents two challenges: firstly, injecting a substantial amount of Lebanese pounds into the market monthly, which might directly impact the exchange rate; secondly, collecting $200 million from the market requires subjecting the purchasing operations to compliance rules, i.e., knowing their sources and verifying the legitimacy of funds, otherwise, the Central Bank of Lebanon might face US sanctions.
However, what’s noteworthy, according to the sources, is that Mikati included in his request the purchase of dollars from the market to cover a $40 million payment to the World Bank as a priority, followed by financing the salaries of public sector employees, as well as the needs of the security forces and public administrations.
The discussion among members of the Central Bank Council focused on the effectiveness of continuing to pay the salaries of public sector employees in dollars, considering the narrow margin between the market rate and the official exchange rate, which does not exceed 5%. As a result, some members suggested that the government should increase salaries instead of relying on the Central Bank of Lebanon to collect dollars on its behalf, and that funding the needs of the security forces should be the only requirement in foreign currency. The discussion did not lead to a final and conclusive outcome, as there was another opinion indicating that paying salaries in Lebanese pounds would also inject a quantity of pounds into the market that could potentially put pressure on the exchange rate.
In the same context, the council decided to convert the money owed by Electricité du Liban in Lebanese pounds into dollars, in order to secure funding for importing the necessary fuel to operate the plants and pay the operating costs to suppliers. The problem is that in the previous period, the institution had been invoicing on a basis of a rate of LBP + 20%, equivalent to 52,000 pounds. Starting from last June, the equation became equivalent to 103,000 pounds per dollar. The discussion concerned who would fund the difference between the collection rate and the actual exchange rate, but it was pointed out that the deficit resulting from invoices issued according to the previous pricing formula is covered by invoices issued according to the new pricing formula (June), in which the dollar rate is higher than its actual rate in the market.