Lebanon’s currency value plunges to 100,000 against US dollar

The Lebanese pound fell to historic lows against the US dollar in the country’s parallel market, the latest gloomy milestone in an economic crisis that has plunged much of the population into poverty.

The Lebanese pound, officially pegged to the dollar at 15,000, was trading at 100,000, a dizzying drop from 1,507 before the economic crisis hit in 2019, dealers said Tuesday.

The market value of the currency at the end of January was about $60,000 per dollar.

Despite the severity of the crisis, the political elite, blamed by many for the country’s financial collapse, failed to stop the free fall of the currency.

Since last year, the country has had no president, but only an interim government amid a continuing stalemate between rival alliances in parliament.

Lebanese banks, which have long since imposed draconian withdrawal limits, essentially depriving depositors of their savings, were closed on Tuesday as they resumed an indefinite strike.

The strike began early last month to protest what the Lebanese Banking Association called “arbitrary” legal action against creditors after depositors filed claims to get their savings back.

In response to the lawsuits, some judges tried to seize the funds of the bank’s directors or board members, or force creditors to pay back customers’ pound sterling dollar deposits at the old exchange rate of £1,507.

Holds

Clients had a two-week reprieve from strike after Acting Prime Minister Najib Mikati intervened late last month to thwart one of the judges investigating banks.

Over the past three years, bank withdrawal limits have sparked public outrage, with some Lebanese resorting to armed robbery in an attempt to get their hands on their own money.

The facades of many of the capital’s banks are almost unrecognizable from the outside, covered with protective metal panels, ATMs have been vandalized, and bank branches have been repeatedly closed for several days.

In mid-February, dozens of angry demonstrators attacked several banks in Beirut after the pound fell to around 80,000 against the US dollar.

Political inaction and lack of accountability have become hallmarks of the Lebanese economic crisis.

Officials have failed to implement any of the reforms demanded by international lenders in exchange for releasing billions of dollars of emergency loans.

Last April, the International Monetary Fund announced an agreement in principle to lend $3 billion to Beirut over four years, subject to a wide-ranging reform package.

Lebanon is facing an economic crisis, largely leaderless, as scattered politicians have been unable to elect a new president for months – in a country already ruled by an interim cabinet with limited powers.

Lebanon has not had a president since Michel Aoun’s term ended in October. Repeated sessions of parliament convened to elect a successor failed to reach agreement on a single candidate.