ISLAMABAD/BEIRUT: The Lebanese pound fell to a historic low against the dollar on the parallel market Tuesday, marking the latest sombre milestone in an economic meltdown has reduced most of the population to poverty.
According to dealers, the Lebanese pound, officially pegged at 15,000 to the dollar, was trading at 100,000 against the greenback, a dizzying drop from 1,507 before the economic crisis hit in 2019. In late January, the currency’s market value was around 60,000 to the dollar.
Despite the gravity of the situation, the country’s political elite, which has been widely blamed for the country’s financial collapse, has done nothing. Since last year, the country has been without a president and only a caretaker government due to a parliamentary deadlock caused by rival alliances.
Lebanese pound and banks
Lebanese banks, which have long imposed draconian withdrawal restrictions, effectively locking depositors out of their life savings, remained closed on Tuesday as an open-ended strike resumed. The strike began early last month in response to what the Association of Banks in Lebanon called “arbitrary” judicial measures taken against lenders after depositors filed lawsuits to recover their funds.
In response to the lawsuits, some judges sought to seize bank directors’ or board members’ funds or to compel lenders to pay out customers’ dollar deposits in pounds at the old 1,507 exchange rate. Customers were granted a two-week reprieve from the strike after caretaker Prime Minister Najib Mikati intervened late last month to obstruct one of the judges investigating banks.
Bank withdrawal limits have sparked public outrage over the last three years, prompting some
Lebanese to resort to armed hold-ups to get their hands on their own money. Many of the capital’s bank facades are almost unrecognisable from the outside, covered in protective metal panels, while ATMs have been vandalised and bank branches have been repeatedly vandalised.
