Lebanon central bank says it can't use reserves to pay for subsidised medical supplies bill

Lebanon central bank says it can't use reserves to pay for subsidised medical supplies bill
Lebanon's central bank says it cannot dip into its reserves to pay for subsidised medical supplies.
2 min read
28 May, 2021
Lebanon has been using subsidised import goods since last year [Getty]

Lebanon’s financial crisis is hitting medical supplies amid the coronavirus pandemic, with the country’s central bank having refused to use reserves to pay for subsidised imported medical goods.

The central bank refused to use its mandatory reserves to pay for $1.3 billion in supplies, after the caretaker health minister Hamad Hasad visited banks asking for the release of funds, Reuters reported.

Lebanon has been using subsidised goods, including fuel, wheat, and medicine since last year, after the pandemic and the explosion at Beirut's port caused its already fragile economy to tank.

"This total cost that is required from the central bank as a result of a policy to subsidise these medical items cannot be supplied without touching mandatory reserves and this is what the board of the central bank refuses," the bank said.

Hasan revealed last week in televised remarks that some 50 per cent of required medicines were sitting in warehouses, with importers waiting for payment.

Strike action

Lebanon's public services shut down on Wednesday as the General Labour Union (GLU) went on strike over the worsening socio-economic conditions in the country.

Adopting the slogan "Salvation Government", the union - which represents several labour associations - demanded a new cabinet be formed to save the country from collapse after the economic crisis left hundreds of thousands without jobs and in poverty.

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Speaking to The New Arab’s Arabic-language service, GLU head Bechara Asmar said workers will escalate their protests if the political stalemate continues.

Lebanon currently has a caretaker government after it resigned in August following the Beirut Port explosion.

"The coming days will be much worse, as the crises… are linked to various sectors, especially in terms of the fuel and electricity crisis, and we have seen how work in Beirut Port is threatened by power cuts,” Asmar said.