The Daily Star— BEIRUT: The Lebanese pound fell against the dollar Saturday, trading at around LL8,750 on the black market, a day after Central Bank Gov. Riad Salameh said that the severe crisis was behind Lebanon. Black market exchangers were selling the dollar for LL8,800 and buying it for LL8,700. The dollar was trading for around LL8,450 Friday. The pound was relatively stable trading between LL7,000 and LL7,500, before the government formation process fell apart. The local currency has been in a decline since then, and Cabinet formation efforts remain stalled amid political deadlock.

As poverty levels rise and the purchasing power of Lebanese falls more every time the exchange rate increases, Salameh has assured that the BDL and the Banking Control Commission will take all the necessary steps to activate the banking sector’s contribution to finance Lebanon’s economy and that the economic crisis will soon be over. However he reiterated that BDL can no longer exhaust the remaining foreign currency reserves to subsidize fuel oil, wheat and medicine in a few months. He added that subsidizing food stuff at a rate of LL3,900 will also end in two or three months. In the absence subsidies of basic necessities at an economically and socially vulnerable time threatens to worsen the situation drastically. To stop a total collapse, sound economic and fiscal policies should be enacted, in addition to the resumption of talks with the International Monetary Fund, however a new government is needed to be able to carry out these actions.