Lebanese millers said Tuesday wheat stocks had fallen to a dangerous level, warning the country might face a supply crisis unless dollars needed to import the grain were supplied at the official rate, the National News Agency reported.
The Central Bank said in a statement later Tuesday that it would issue a circular in a week’s time to organize the funding of imports of wheat, medications and gasoline. It said this step would be taken after a request from the president, prime minister and finance minister.
In a statement, the Lebanese millers’ association urged officials to find a fix for dollars to be supplied at the official price “so the owners of the mills can resume their work and import the country’s wheat need.”
The Lebanese pound has been pegged to the dollar at 1,507.5 pounds for over two decades.
Central Bank Gov. Riad Salameh said Monday dollars were available and banks were meeting customer demand. The Central Bank had not received any official complaints about dollar availability, he said.
Distributors of fuel, also complaining they can’t secure their dollar needs at that price, went on strike last week, saying a lack of dollars at the official rate was forcing them to pay more at money exchange houses.
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The millers group said it was determined to supply flour to bakeries at the official Lebanese pound price “but the problem is that converting Lebanese pounds to U.S. dollars has become very costly.” This had led millers to issue invoices in U.S. dollars “to preserve operating capital and the continuation of our work.”
“The wheat reserve at the mills has fallen to a level that represents a danger, and this may expose the country to a supply crisis if the U.S. dollar problem is not resolved,” it said.
The Lebanese economy has suffered from a slowdown in capital inflows from abroad that have long been used to finance the budget and current account deficit. The Central Bank’s foreign assets, excluding gold, fell around 15 percent from an all-time high in May last year to $38.7 billion in mid-September.
Hasan Assaf, a member of the millers’ association, said banks had been gradually curbing supply of dollars for two months. Wheat reserves held by private millers had fallen to two months’ supply from four, he told Reuters. “We can’t place import requests because we cannot secure dollars to open credit lines,” he said.
Prices charged by money exchange houses for dollars had touched as high as 1,580 pounds, he said.
This article has been adapted from its original source.
