The destruction wreaked on Lebanon’s capital in the Beirut port explosion yesterday that killed more than 100 people is in the “billions” of dollars, the country’s central bank said today.
The bank will approve interest-free loans for five years to individuals and companies who had property destroyed, a central bank official told CNBC’s Hadley Gamble. It will also sell dollars to all importers of aluminum, wood or glass at the rate of 3,900 Lebanese pounds per dollar, well below the black market rate of more than 8,000 pounds to the dollar.
Lebanon’s currency remains officially pegged to the dollar, but it’s an artificial peg; years of excessive dollar selling to prop up the national currency along with myriad other financial mismanagement and soaring foreign debt has left the country practically devoid of dollars, which are crucial for importing goods.
Lebanese banks have placed restrictions on withdrawals, leaving residents locked out of their bank accounts, and those who saved in local currency have seen their life savings wiped out. The country was already struggling to import food and basic goods — and imports make up 80% of its food needs.
Beirut’s residents are in shock and mourning after the enormous explosion at the city’s port ripped through miles of surrounding homes and businesses and injured more than 4,000 people. Hospitals are overwhelmed, with some too damaged by the blast to operate.
The explosion has been initially blamed on 2,750 tons of ammonium nitrate stored in an unsecured warehouse for the last six years at Beirut’s cargo port. But the government subsequently announced an investigation to determine within five days the exact cause of the explosion and “who was responsible.”