Read on Twitter
1/ A small thread on the exchange rate 
2/ Again with the basics: rate will be set by supply and demand. Any attempt to force the market will fail miserably, it is a simple reality. To curb the flying rate you either increase the supply by pumping dollars in the market or reduce the demand
3/ Since the short term capacity to pump USDs is very limited, the only other option is to reduce demand. I have covered this subject extensively in the past so i am going to update it here.
4/ The latest customs data show a deep (expected) decline in imports for the first 4 months of 2020. If we extrapolate for the end of the year taking the gradual decrease of imports and the year on year trends , we could reach $9.5bn total imports for 2020
5/ In the same period , real exports have not regressed and are on target to reach the $2.8 bn - $3 bn mark. This would theoretically leave a $6.5 bn hole to plug.
6/ In 2019 remittances to Lebanon reached around $8 bn and should not fall by much as expats find the need to help their parents and loved ones increase by the day. So we can conservatively estimate that the $6.5 bn hole can be plugged by remittances.
7/ This would leave Lebanon with a balanced BoP for the first time in many years. So why is the rate climbing at an uncontrollable rate ? Simply because it is NOT financing our BoP.
8/ There are 6 kinds of entities vying for hard currency in the market : Importers, Manufacturers, Smugglers, Panic Buyers, Speculators and Lollar Depositors.
If we don't prevent the last 4 from dealing on the market the rate will keep rising alarmingly
If we don't prevent the last 4 from dealing on the market the rate will keep rising alarmingly
9/ We can achieve this by moving largely to a cashless economy and moving the exchange transactions back to the banks against import documents. Capital controls cannot be called as such if you can retrieve your money in LBP and attempt to exchange them in the market.
10/ The ABL and the BDL should act immediately to limit the use of cash by issuing Debit Cards to all those who are currently banked, and create a big push towards reaching the unbanked. Concurrently they should limit the use of banknotes to 500k LBP per month.
11/ The BDL's platform should be used exclusively with banks and only registered companies would be able to by hard currency against controllable documents (we have proposed a similar scheme @alindustrialist ).
12/ Hyperinflation , especially when it doesn't reflect the real needs of the economy (vs the Financial sector), will destroy purchasing power and thus any chance of recovery. Until we get our house in order and get the IMF on board, the above actions might save the country.
13/ @lebfinance
@AndyKhalil1
@AzarsTweets
@wael_atallah
@EHSANI22
@elie_h
@Mohdfaour89
@AdibChristian
@HuseinNourdin
@dgheim
@Skazzi
@nafezouk
@Counter_______
@Decafquest
@finance4lebanon
@masss11
@Localist15
@AndyKhalil1
@AzarsTweets
@wael_atallah
@EHSANI22
@elie_h
@Mohdfaour89
@AdibChristian
@HuseinNourdin
@dgheim
@Skazzi
@nafezouk
@Counter_______
@Decafquest
@finance4lebanon
@masss11
@Localist15
