BEIRUT: Food and fuel prices in Lebanon soared on Tuesday as the country’s currency plunged in value to a record low.
Officially pegged at 15,000 to the US dollar, the pound was trading at 100,000 on unofficial exchange markets — compared with 41,000 as recently as January, and 1,500 before the economic meltdown began in 2019.
Banks, which have imposed draconian withdrawal restrictions — essentially locking depositors out of their life savings — were closed on Tuesday after resuming a strike.
Lebanese resorted to black humor, complaining about having to weigh their money rather than count it, and needing shopping bags to carry banknotes to the currency exchange. They blame the country’s political elite for causing the collapse and doing nothing to address it. Lebanon has had no president and a caretaker government since last year, mired in squabbling between rival factions.
“The platforms that manipulate the black market exchange rate have turned into a tool of blackmail and settling scores between the central bank governor, his opponents, the banks, and the judiciary,” onefinancial analyst said:
“Meanwhile, citizens and depositors pay the price. Nothing is stopping the exchange rate from reaching 150,000 pounds to the dollar during Ramadan, or even 200,000 after Easter and Eid.”
Abu Abbas, 75, who owns a small jewellery stall on Beirut’s busy Hamra Street, said he was barely making ends meet. “The lira has become completely worthless,” he said. “I used to buy medicine for my wife for 40,000 pounds, now it costs 900,000.”
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Mohammad Al-Rayes, 65, another shopkeeper in Beirut, said: “Ruling politicians... robbed the country and stole depositors’ money. They should leave and bring new leaders. Very tough times are coming.”
MP Ghassan Skaf said: “Before, we used to attract investments and tourists. Today we’re attracting money launderers, and we do not see any official intention to stop the collapse.”
The International Monetary Fund agreed in April last year to provide Lebanon with $3 billion in loans spread over four years, conditional on a package of sweeping reforms. But officials have failed to enact the changes demanded by international creditors in return for unlocking the emergency loans.
Meanwhile central bank governor Riad Salameh is being investigated at home and abroad for the suspected embezzlement of hundreds of millions of dollars. A Lebanese judge has asked Salameh to appear before visiting European investigators on Wednesday as part of a multinational probe into his personal wealth.
Lebanon is facing the economic meltdown largely leaderless, as the divided parliament has failed to elect a new president for months — in a country already governed by a caretaker Cabinet with limited powers.
Repeated sessions convened to elect a successor to Michel Aoun, whose term ended in October last year, have all failed to reach agreement on a consensus candidate.
The pound’s steady downfall reflects a “total loss of confidence in the policy makers of the country,” said Saeb El-Zein, a Lebanese former banker who worked with international lenders.
“You need political leadership to have economic leadership — and we don’t have political leadership.”