The Lebanese Central Bank said it will not devour its mandatory foreign exchange reserves to cover the cost of subsidized medical products.

The Lebanese Central Bank said on Thursday that it would not be able to maintain the system of subsidized medical products without using mandatory reserves, and asked the relevant authorities to find a solution to the problem.

Lebanon has been threatening its stability since the financial crisis and has been subsidizing fuel, wheat, medicines and other basic commodities since last year.

In a statement issued after the caretaker Health Minister Hamad Hasan said that he had visited the bank and demanded the release of funds for essential medicines to no avail, the Central Bank (also known as the Liban Bank) stated that it would not use it. The mandatory reserve is used to cover the cost of subsidized medical supplies of US$1.3 billion.

The statement said: “The total cost of the central government’s subsidies for these medical projects cannot be provided without the use of mandatory reserves. This is rejected by the central bank’s board of directors,” the statement said.

Lebanon’s hard currency reserves have dropped astonishingly from 30 billion U.S. dollars before the financial crisis at the end of 2019 to 15 million U.S. dollars in March.

The broader subsidy program costs about $6 billion annually.

Hassan said on a local TV show last week that about 50% of the needed medicines are available, but in the warehouses of importers waiting to pay.

Lebanon has fallen into political paralysis, is heavily indebted, and is struggling to raise funds from potential donor countries and institutions. The country said that the funds used for subsidies will be used up in May.

Traders and consumers have criticized the design and implementation of its subsidy system, which includes a long list of non-essential items.