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The Lebanese pound (LBP) parallel market exchange rate depreciated to a record low of LBP 47,800 per 1 US dollar (USD) by December 26, largely due to an increase in money supply in December. The exchange rate sharply appreciated on December 27, when the Central Bank increased the Sayrafa exchange rate to LBP 38,000 and lifted all limits on individuals and institutions buying and selling USD at commercial banks via the official exchange platform. In addition to opening greater access to Sayrafa, the Central Bank announced that the official exchange platform would be accessible through 5 PM on all business days until January 31, 2023. Sayrafa transactions totalled USD 300 million per day and USD 1.09 billion overall from December 26 to January 5. In early January, the Central Bank limited Sayrafa transactions to LBP 100 million per month and restricted official use of Sayrafa to individuals.
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Fuel prices (per 20 liters) decreased in December and closed the month at LBP 729,000 for 98-octane, LBP 709,000 for 95-octane, LBP 790,000 for diesel, and LBP 466,000 for cooking gas.
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The European Union allocated 229 million euros to Lebanon on December 14, which will be used to enforce good governance reforms, support the country’s public administration, and enable greater transparency and accountability.
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Three parliamentary sessions dedicated to electing a new president ended without success, as political horse trading, particularly disagreements among parties in the March 8 bloc, prolong the election of a new president and naming of a new government.
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The caretaker government convened an urgent meeting on December 5 to discuss medical care and social assistance, at which ministers requested that the Central Bank release USD 35 million to buy medicine and milk for children, though no documentation has been released which details plans on how the funds would be allocated. Also, the cabinet approved social assistance for members of the military and pensioners, with caretaker Minister of Information Ziad Makary claiming that the assistance will be valued at double the recipients’ monthly income.
By Crisis Analytics Team, Mercy Corps Lebanon
