Lebanon’s central bank has said it will not eat into its mandatory foreign exchange reserves to cover the cost of subsidized medical supplies.
Lebanon’s central bank said on Thursday that the system of importing subsidized medical supplies could not be sustained without using its mandatory reserves and called on authorities to find a solution.
Lebanon, which is facing a financial crisis that threatens its stability, has been subsidizing fuel, wheat, medicine and other basic commodities since last year.
In a statement issued by acting health minister Hamad Hassan, he said he had visited the bank and could not return the money for essential medicines. The central bank – also known as Bank du Liban – said it would not sink into mandatory reserves. Grants to cover the 1.3bn cost of medical supplies.
“As a result of the policy of subsidizing these drugs, the total cost required by the central bank cannot be supplied without touching the mandatory reserves, and this has been rejected by the central bank’s board,” the statement said.
Leighton’s hard currency reserves plummeted to more than 0 billion in March 2010 before the end of the 2010 financial crisis.
The broader subsidy program costs around bn 6bn a year.
On a local television program last week, Hassan said that 500 percent of the required medicine was available but in the warehouses of importers who were waiting for payment.
Lebanon, which is politically paralyzed, says it is struggling to raise money from serious donors and potential donor states and institutions, and that money will be spent on subsidies in May.
The design and implementation of its grant system, which included long lists of non-basic goods, has been criticized by traders and consumers as rubbish.