Lebanese pound hits historic low of 100,000 against USD

By Al Mayadeen English
Source: Agencies
14 Mar 2023 17:25

The Lebanese pound reaches a new record low, as Lebanon stands leaderless without a head of state and a caretaker government.

Lebanese pound banknotes at a currency exchange shop in Beirut, Lebanon, Jan. 5, 2022 (Reuters)

The Lebanese pound sank to a historic low against the dollar on the parallel market Tuesday, the latest milestone in an economic meltdown.

Officially pegged at 15,000 to the dollar, the pound was trading at 100,000 against the dollar -- a plunge from 1,507 before the economic crisis hit in 2019.

Last January, the currency's market value was at around 60,000 to the dollar.

The currency plunge has triggered price hikes on fuel, food, and other basic goods, with supermarkets starting to price items in dollars this month.

Despite the gravity of the crisis, the country has had no president and only a caretaker government, amid persistent deadlock between rival factions since last year.

Banks on strike

Lebanese banks, which have imposed draconian withdrawal restrictions -- essentially locking depositors out of their life savings -- were closed on Tuesday as they resumed an open-ended strike.

The strike began early last month to protest what the Association of Banks in Lebanon described as "arbitrary" judicial measures against lenders after depositors filed lawsuits to retrieve savings.

Some judges sought to seize the funds of bank directors or board members or to force lenders to pay out customers' dollar deposits in pounds at the old 1,507 exchange rate.

Customers had a two-week reprieve from the strike after caretaker Prime Minister Najib Mikati intervened late last month to impede the work of one of the judges investigating banks.

Withdrawal limits have sparked public outrage that has seen some Lebanese resort to armed hold-ups in a bid to lay 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.

Central Bank governor investigated for suspected embezzlement

In a related context, Central Bank Governor Riad Salameh is being investigated in Lebanon 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 an economic meltdown largely leaderless, as the divided parliament has failed to elect a new president for months.

Repeated sessions convened to elect a successor to former President Michel Aoun, whose term ended in October last year, have all failed to reach an agreement on a consensus candidate.