The value of the Lebanese pound on the parallel market is at an all-time low as the country’s economic crisis continues.
The Lebanese pound has fallen to an all-time low against the US dollar in the country’s parallel market, the latest dismal milestone in an economic collapse that has plunged much of the population into poverty.
The Lebanese pound, officially pegged at 15,000 to the dollar, was trading at 100,000 against the greenback, dealers said Tuesday — a staggering plunge from 1,507 before the economic crisis hit in 2019.
The market value of the currency was about $60,000 at the end of January.
Despite the severity of the crisis, the political elite, widely blamed for the country’s financial collapse, has failed to stop the currency’s free fall.
As of last year, the country has had no president and only a caretaker government amid an ongoing deadlock between rival alliances in parliament.
Lebanese banks that have long imposed draconian withdrawal restrictions – effectively denying depositors their savings – were closed on Tuesday as they resumed an indefinite strike.
The strike began early last month to protest what the Association of Banks in Lebanon described as “arbitrary” legal action against lenders after depositors filed lawsuits to recover savings.
In response to the lawsuits, some judges tried to seize the funds of bank executives or board members or force lenders to pay out customers’ dollar deposits in pounds at the old exchange rate of 1,507.
To hold up
Customers were given a two-week reprieve from the strike after Acting Prime Minister Najib Mikati intervened late last month to obstruct the work of one of the judges examining banks.
Over the past three years, banks’ withdrawal limits have sparked public outcry, leading some Lebanese to resort to armed robbery in an attempt to get their hands on their own money.
The facades of many banks in the capital are almost unrecognizable from the outside, covered in protective metal panels, while ATMs have been vandalized and bank branches have been repeatedly closed for days.
In mid-February, dozens of angry protesters attacked several banks in Beirut after the pound fell to about 80,000 against the greenback.
Political passivity and a lack of accountability have characterized the Lebanese economic crisis.
Officials have failed to implement any of the reforms demanded by international creditors in exchange for releasing billions of dollars in emergency loans.
In April last year, the International Monetary Fund announced an agreement in principle to provide Beirut with $3 billion in loans over four years – subject to a package of sweeping reforms.
Lebanon faces the economic collapse largely leaderless as divided politicians have failed to elect a new president for months – in a country already governed by a caretaker cabinet with limited powers.
Lebanon has not had a president since Michel Aoun’s term ended in October. Repeated sessions of parliament called to elect a successor have all failed to agree on a consensus candidate.