BEIRUT (AP) – The Lebanese government on Monday agreed to provide tens of thousands of poor families with cash assistance in US dollars through a World Bank loan as the country’s economic crisis deepens.
The move comes as Lebanon is expected to end fuel subsidies by the end of next month, a move that is expected to result in a sharp increase in the prices of almost all products.
The Lebanese parliament approved in March a loan of 246 million dollars from the World Bank which would provide assistance to more than 160,000 families. But the move was delayed by the government’s insistence on paying it in Lebanese pounds.
Saroj Kumar Jha, the regional director of the World Bank, tweeted on Monday that he had received a letter from Acting Finance Minister Ghazi Wazni confirming that beneficiaries would be paid in US dollars.
“This move would allow poor households to receive the full value of @WorldBank’s help and protect the goals” of a national social safety net, Jha tweeted.
The US dollar is trading at around 20,000 pounds on the black market, negatively affecting the purchasing power of many people in the small country of 6 million people, including one million Syrian refugees. More than half of the Lebanese population lives in poverty.
It was not immediately clear how much money each of the 161,257 families – or roughly 800,000 people – will receive. The government previously planned to give each family 800,000 Lebanese pounds per month for a year, with the dollar being calculated at 6,240 pounds.
According to a World Bank statement in January, a significant portion of the loan – nearly $ 200 million – will be used to provide cash assistance to about 786,000 people via a prepaid electronic card.
Since the onset of Lebanon’s economic and financial crisis in late 2019, there have been different dollar exchange rates in this heavily indebted country, including the official rate of around 1,500 pounds to the dollar and the black market rate.
A new rate of 8,000 pounds to the dollar was put in place this weekend for fuel imports in a bid to alleviate Lebanon’s worst oil crisis in decades. Until Sunday, the exchange rate used for fuel imports was 3,900 pounds to the US dollar.
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