Lebanese crisis exacerbating as Lebanese pound plummets
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The Lebanese pound has lost more than 95% of its value since 2019 when the Banking System's Ponzi scheme was exhausted.
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People pass by the Lebanese Central Bank, in Beirut, Lebanon, Monday, Sept. 26, 2022. Three years into a crippling financial crisis, Lebanon's Central Bank on Wednesday, Feb. 1, 2023, set a new exchange rate that effectively devalued the country's currency by 90% (AP Photo/Bilal Hussein, File)
On Wednesday, the Lebanese pound [Lira] set a record low against the dollar. The official dollar-for-lira exchange value set by the government has been recently modified from 1,500 to 15,000. The real exchange value of the dollar is expressed in the black market rate which surged on Wednesday to reach 75,000 liras after having amounted to roughly 50,000 liras one month ago.
The Lebanese pound has lost more than 95% of its value since 2019 when the Banking System's Ponzi scheme was exhausted.
In 2021, The Lebanese government ended subsidies for fuel and essential items like wheat and medications.
After the recent depreciation, fuel prices spiked when already more than 80% of the population lives under the poverty line according to UN reports.
This prompted a mass strike by Lebanese taxi drivers who blocked the road in front of the interior ministry on Wednesday protesting deteriorating income; the average for a taxi today amounts to $1.3
"My income is not enough to even buy fuel," a 33-year-old driver told AFP. "Rent for my house is $300, let alone food and drink. Where can I get this money?"
Further exacerbating the problem is the political gridlock. The Lebanese parliament has failed to occupy the position of president.
Last April, the International Monetary Fund announced a preliminary agreement for a $3 billion bailout loan for Lebanon spread out over four years, conditioned on reforms.
However, the IMF has since been pessimistic about Lebanon's aspiration for reform to alter the banking secrecy rules and the industry as a whole.
Read more: IMF may be discontented with Lebanon 2022 budget - Economy Minister
