Lebanese pound lost almost 90% of its value in 18 months

BEIRUT — Lebanon's currency hit a new low against the dollar on the black market Tuesday, continuing its freefall in a country gripped by political deadlock and an economic crisis.

The latest plunge means the Lebanese pound has lost almost 90 per cent of its value on the informal market in just 18 months.

The Lebanese pound has been pegged to the dollar at 1,500 since 1997, but the country's worst economic crisis since the 1975-1990 civil war has seen its unofficial value plummet.

The slide has picked up speed over the past two weeks, with the exchange rate soaring from 10,000 Lebanese pounds to the dollar on March 2 to around 15,000 on Tuesday.

Three money changers said they were buying dollars for 14,800 to 14,900 Lebanese pounds, while a customer told AFP they had sold the foreign currency at 15,000 pounds to the dollar.

The pound's fall has led to soaring food prices in a country where more than half of the population now lives below the poverty line.

The smell of burnt tyres wafted over Beirut on Tuesday after gaggles of protesters took to the streets in the capital and elsewhere in the country, in the latest such demonstrations in recent weeks.

"Lebanon exchange rate reaches 15,000LL to the 1$. Last night it was 13,250," tweeted analyst Maha Yahya.

“Country collapsing around us & we are unable to do anything,” said Yahya, the director of the Carnegie Middle East Centre.

Since autumn 2019, banks have largely prevented ordinary depositors from accessing their dollar savings or transferring them abroad, forcing them to resort to the black market to obtain foreign currency.

In a country that needs dollars to import goods, several shops have closed their doors in recent days to re-price goods and some factories have halted production.

The government resigned in August last year after a devastating port blast that killed 200 people and ravaged a large part of the capital.

But the deeply divided political class has failed to form a new Cabinet to enact desperately needed reforms to unlock billions of dollars in promised international aid.

France and the United States last week hit out at Lebanon’s squabbling politicians, with Paris saying they were failing to help the country as it slid towards “total collapse”.

France has taken a leading role in trying to break the political deadlock in its former protectorate, with President Emmanuel Macron visiting the country twice last year.