Lebanese currency reaches record-low value

A money exchange vendor counts US dollar banknotes at his shop in Beirut, Lebanon January 19, 2023. (Reuters/File)

• Official exchange rate changed from 1,505 LBP/USD to 15,000 LBP/USD, reaching over 60,000 LBP/USD on black market
• Council of Maronite Bishops: Lebanon on the verge of complete collapse

BEIRUT: After being pegged at 1,505 pounds to the US dollar 25 years ago, the Lebanese pound’s official exchange rate changed to 15,000 pounds to the dollar as of Wednesday.
The previous exchange rate lasted from 1998 until 2019, when the financial crisis erupted and the Lebanese currency began to gradually collapse, losing about 97 percent of its value by 2023.
The Lebanese Ministry of Finance has started charging value-added tax based on the new rate, causing confusion in the markets, as all official and unofficial transactions changed. Meanwhile, the black-market exchange rate ranges between 59,000 and 61,000 Lebanese pounds to the dollar, in the absence of any solutions by the Central Bank or the government.
Almost all services and products are now priced in US dollars: foodstuffs, medicine, gasoline, the Internet, and private generator bills. Security services seem to have given up on pursuing illegal money changers, who are now operating using secret social media groups or personally making home visits to practice their illegal exchanges.
During its monthly meeting on Wednesday, the Council of Maronite Bishops warned against the dangerous manipulation of the exchange rate on the black market, which leads to extreme price hikes, preventing most of the Lebanese people from securing their needs.
The council urged Parliament to convene and elect a new Lebanese president to end the four-month presidential vacuum.
The council further warned that Lebanon is on the verge of a complete catastrophic collapse and blamed the MPs’ reluctance to elect a president for this worsening collapse.
Over the past two days, Lebanon’s parties have been intensifying their meetings to come to an agreement on a new presidential candidate, form a government and appoint a governor for the Central Bank.
Parliament Speaker Nabih Berri is yet to set a new date for the presidential election session after the Progressive Socialist Party’s MPs threatened to stop attending voting sessions if Hezbollah’s MPs and their allies insist on casting blank votes.
A spiritual summit was held that included the Catholic and Orthodox patriarchs, dedicated to discussing a way to resolve the presidential crisis.
Head of the Progressive Socialist Party Walid Jumblatt said after his meeting with Berri on Tuesday evening that he is trying to find common denominators with all the parties to finally elect a new president.
“The country is abandoned, the economic situation is deteriorating, and the judicial situation is collapsing as well,” he said.
Among the candidates being discussed is Army Commander Gen. Joseph Aoun, but agreeing to elect him requires amending the constitution.
So far, no presidential candidate has the support of 65 MPs. The Free Patriotic Movement and the Lebanese Forces party oppose the candidacy of Suleiman Frangieh, an ally of Syrian President Bashar Assad. However, Hezbollah supports him.
MP Michel Moussa, a member of the Parliamentary Development and Liberation Bloc, said: “The election of a president is still hampered by the vertical division in Parliament, as none of the two opposing poles is able to rally votes for its candidate.”
Moussa noted: “Berri knew from the start that this would happen, and this is why he called for dialogue, but no one responded, although everyone is well aware that the only way to start solving Lebanon’s crises is to elect a new president and form a new government that would implement reforms according to a recovery plan.”