Lebanese pound hits historic low, further shakes up its frail economy and political structure

Lebanese_pound

On Tuesday, Lebanese pound slipped hitting its historic low at 15,000 pounds per dollar. The country’s crumbling economy enraged its people. Lebanese people had already taken to the streets to protest against rampant increase in prices and worsening living standards. The UN report showed that the country’s long struggle with rising inflation pushed over half of its population below the poverty line.

The country plummeting exchange rate dropped its maximum over the past two weeks, with the exchange rate reaching 10,000 Lebanese pounds to the dollar on March 2 to around 15,000 on March 18. Researcher Kamal Hamdan, who leads the Consultation and Research Institute in Beirut, said that due to the country’s flawed economic and monetary policies, nothing could save the country’s currency from slipping further. He said, “Due to these structural defects, there is no ceiling for the deterioration of the Lebanese pound.”

With the basic necessities becoming unaffordably expensive, people of Lebanon fear of suffering from the pandemic of hunger and poverty rather than COVID-19. Since 2019, the country’s shrinking economy pushed government to adopt restrictive policies including barring its people from accessing their dollar savings or transferring them abroad. The move eventually forced people to resort to the black market to obtain funds. Lebanon has now been witnessing scenes of hundreds of people queuing outside money-exchange shops with identity cards (of relative or family members) to buy US dollars in their names and sell them later on the black market.

Read more : Lebanon crisis gets worse, politicians continue to ignore governance

Maha Yahya, lead analyst and director of the Carnegie Middle East Center, took to twitter to highlight the country’s vulnerability. Yahya said, “Lebanon exchange rate reaches 15,000LL to the 1$. Last night it was 13,250. Country collapsing around us & we are unable to do anything.”

The country’s unstable political environment added to its economic crisis as Lebanese leaders approached International Monetary Fund last year for the aid, but the discussions turned flat due to lack of commitment and political consensus over implementation of required reforms.

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