The International Monetary Fund said the Lebanese central bank’s decision to allow dollar depositors to withdraw funds partly in the US currency risks fanning prices.
Gerry Rice, spokesman for the Washington-based fund, said it wasn’t clear how the withdrawals would be financed given the scarcity of foreign currency amid the country’s economic crisis and the need to continue financing imports of goods and services.
“There is also a serious risk that the amount of liras in circulation would increase further from already pretty high growth rates, thus adding both to inflationary pressures, and to the depreciation of the lira, which would be highly detrimental to standards of living”, he said.
The central bank has asked local lenders to begin paying withdraw requests half in dollars and half in Lebanese pounds, or liras, based on an exchange rate set by the regulator’s platform, currently 12,000 pounds per dollar. The country’s decades-old peg has collapsed from a fixed 1,507.50 pounds per dollar to nearly 14,000 on the black market.
Commercial banks stopped dispensing dollars over a year ago after foreign-currency inflows dried up during a spiralling economic and political crisis, and central bank reserves plunged.
Mr Rice said a capital control law that Lebanon’s parliament has nearly finished drafting should be part of a broader package of reforms and appropriate fiscal monetary measures.
“We don’t see the need to implement a capital control law. No, especially without the support of appropriate fiscal monetary and exchange rate policies,” he said.
Lebanon’s talks with the IMF over a $10 billion bailout fell through after the central bank and lenders disputed so-called embedded losses in the financial sector. The resignation of the government last year following an explosion at the Port of Beirut, and the current paralysis in forming a new one, brought an indefinite halt to the negotiations.
Authorities have failed to enact a capital control law to formalise de facto withdrawal restrictions by local lenders that critics say are selective. The judiciary is investigating what it has termed illegal transfers of billions of dollars at the onset of the crisis in 2019.
Infobox
Western Region Asia Cup Qualifier, Al Amerat, Oman
The two finalists advance to the next stage of qualifying, in Malaysia in August
Results
UAE beat Iran by 10 wickets
Kuwait beat Saudi Arabia by eight wickets
Oman beat Bahrain by nine wickets
Qatar beat Maldives by 106 runs
Monday fixtures
UAE v Kuwait, Iran v Saudi Arabia, Oman v Qatar, Maldives v Bahrain
Types of policy
Term life insurance: this is the cheapest and most-popular form of life cover. You pay a regular monthly premium for a pre-agreed period, typically anything between five and 25 years, or possibly longer. If you die within that time, the policy will pay a cash lump sum, which is typically tax-free even outside the UAE. If you die after the policy ends, you do not get anything in return. There is no cash-in value at any time. Once you stop paying premiums, cover stops.
Whole-of-life insurance: as its name suggests, this type of life cover is designed to run for the rest of your life. You pay regular monthly premiums and in return, get a guaranteed cash lump sum whenever you die. As a result, premiums are typically much higher than one term life insurance, although they do not usually increase with age. In some cases, you have to keep up premiums for as long as you live, although there may be a cut-off period, say, at age 80 but it can go as high as 95. There are penalties if you don’t last the course and you may get a lot less than you paid in.
Critical illness cover: this pays a cash lump sum if you suffer from a serious illness such as cancer, heart disease or stroke. Some policies cover as many as 50 different illnesses, although cancer triggers by far the most claims. The payout is designed to cover major financial responsibilities such as a mortgage or children’s education fees if you fall ill and are unable to work. It is cost effective to combine it with life insurance, with the policy paying out once if you either die or suffer a serious illness.
Income protection: this pays a replacement income if you fall ill and are unable to continue working. On the best policies, this will continue either until you recover, or reach retirement age. Unlike critical illness cover, policies will typically pay out for stress and musculoskeletal problems such as back trouble.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
ITU Abu Dhabi World Triathlon
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
