Lebanon agrees to repay World Bank dollar loan to the poor

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BEIRUT (AP). On Monday, the Lebanese government agreed to pay tens of thousands of poor families in cash assistance in US dollars from a loan from the World Bank as the country’s economic crisis deepens.

The decision comes as Lebanon is expected to end fuel subsidies by the end of next month, which is expected to spike prices for almost all products.

In March, the Lebanese parliament approved a $ 246 million World Bank loan to help more than 160,000 families. But the move was delayed because the government insisted on paying it in Lebanese pounds.

Saroj Kumar Jha, the World Bank’s regional director, tweeted Monday that he received a letter from interim finance minister Gazi Vazni confirming that the beneficiaries would be paid in US dollars.

“This solution will enable poor households to fully benefit from @WorldBank and protect the goals of the national social safety net,” Jha tweeted.

The US dollar is traded on the black market for about 20,000 pounds, negatively affecting the purchasing power of many in this tiny country of 6 million, including a million Syrian refugees. More than half of Lebanon’s population lives in poverty.

It was not immediately clear how much money each of the 161,257 families, or about 800,000 people, would receive. The government previously planned to provide each family with 800,000 Lebanese pounds per month for one year at the rate of £ 6,240 in dollars.

The World Bank said in January that a significant portion of the loan – almost $ 200 million – will go towards cash assistance to approximately 786,000 people through a prepaid e-card.

Since the economic and financial crisis began in Lebanon in late 2019, the heavily indebted country has had different dollar-to-dollar exchange rates, including an official rate of around £ 1,500 per dollar and a black market rate.

Over the weekend, a new rate of £ 8,000 per dollar was imposed on fuel imports in an attempt to alleviate Lebanon’s worst fuel crisis in decades. Until Sunday, the exchange rate used for fuel imports was £ 3,900 per US dollar.

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