Lebanese currency continues to slump amid economic collapse
BEIRUT (AP) — Lebanon’s national currency plummeted further on Monday, trading on the black market at nearly 20 times its value two years ago, adding to inflation and people’s desperation.
The Lebanese pound was trading at 27,000 to the dollar on the black market, hitting a new low in its downward trajectory since October 2019 as the Lebanese economy collapsed. The currency is officially pegged at 1,500 pounds to the dollar.
The economic collapse has been described as one of the world’s worst in over 150 years. Inflation and commodity prices have soared in Lebanon, which imports more than 80% of its commodities.
Shortages of basic supplies, including fuel and medicine, and restrictions on bank withdrawals and transfers, especially in foreign currency, have increased the desperation of Lebanese in the once middle-class country.
Poverty has increased exponentially while the political class, accused of years of corruption and mismanagement, has failed to come up with drastic solutions to the crisis. Negotiations with the International Monetary Fund for a stimulus package have become mired in political disagreements and exchanges of blame.
The latest drop in the exchange rate follows a central bank directive last week that changed the rate used when depositors make withdrawals from existing dollar accounts to 8,000 pounds to the dollar, from 3,900 previously for a dollar.
The directive allowed people to recover money they had not had access to due to the informal capital controls introduced by banks at the start of the crisis. But experts said it put more pressure on the national currency as the central bank would print more pounds, further reducing their value and purchasing power.