US dollar value IN DANGER with fears Lebanese economy collapses due to political TURBULENCE | World | News

Lebanon has two official currencies: the Lebanese pound and the US dollar.

In the event that Lebanon falls into an economic collapse, it would raise fears that it will affect the value of the dollar, a currency widely used around the world.

Due to the country’s increasing economic turmoil, Lebanon has become increasingly dependent on the dollar, with banks offering higher returns if people change their Lebanese pounds into dollars.

After the first elections in more than 10 years, held in May, Lebanese Prime Minister-designate Saad Hariri was tasked by President Michel Aoun with forming a cabinet.

More than 120 days later, Mr. Hariri has still not responded to this request.

While the time taken to form a government so far is not the longest in Lebanon’s history, with the longest taking more than 300 days, the instability has raised international concerns.

The IMF said Lebanon needed “immediate and substantial fiscal adjustment” to make its public debt sustainable.

The Prime Minister expressed his hope and said that “the disagreements we see in the formation of the government will disappear”.

However, after multiple attempts, no government was formed.

The Lebanese economy is expected to grow by 1.3% in 2018, down from the previous year which saw an increase of 1.8%.

The country’s budget deficit is expected to widen to 9.7% and as a result, the public debt-to-GDP ratio is expected to rise to 151% from 148% in 2017.

At the Cedre conference in Paris last April, international donors pledged more than $11bn (£8.4bn) in loans and grants to help Lebanon’s struggling infrastructure.

However, in the absence of a functioning government, the authorities were unable to launch the reforms decided by Parliament and approve the economic package.

The Prime Minister-designate met President Aoun on Wednesday and, according to Mr. Hariri, developments were made.

He said: “The atmosphere is positive, God willing, and I’m very optimistic.

“I agreed with the president on the need to speed up the formation of the government because of the economic situation.”

However, the head of the Lebanese Forces, Samir Geagea, was pessimistic about the possibility of a quick government formation.

Mr. Geagea said: “According to the information available, there is no indication that the formation of the government is imminent.

‘It is essential that the Cabinet meets in the same way as the cover of Parliament for maximum economic necessity to take action to stop the deterioration rather than revive the outgoing Cabinet.’

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