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World Bank grants Lebanon $150 million loan for food security

BEIRUT (AP) — The World Bank has approved a $150 million subsidized loan for food security in crisis-ridden Lebanon to stabilize bread prices over the next few months, the economy minister said Monday.

Amin Salam told reporters that the loan had a very low interest rate, but the minister did not make the rate public. He used the term subsidized loan indicating an interest rate below the market rate.

The loan will bring great relief thanks to the stability of bread prices in Lebanon during the country’s historic economic crisis.

There were fears the government could lift subsidies on wheat as foreign exchange reserves fall to critical levels at the central bank. Any lifting of subsidies would sharply increase the price of bread, hurting the poor in the Mediterranean nation where more than three-quarters of its 6 million people, including 1 million Syrian refugees, now live in poverty.

The small Mediterranean nation is in the grip of a devastating economic crisis that has been described by the World Bank as one of the worst in modern history. It imports most of its wheat and has faced shortages in recent weeks as war in Ukraine drives up oil and food prices around the world.

Salam said the loan comes at a time “when we cannot bear any instability of the influx of wheat”, adding that the bread will now be available in the coming month.

Salam said last month that the government had no immediate plans to lift bread subsidies, especially for the flour used in making Arabic flatbread, Lebanon’s main staple.

He said the war in Ukraine is forcing Lebanon to find new sources of wheat that are far away and more expensive.

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