Lebanon: local currency at historic low, angry street

The Lebanese pound hit an all-time low on the black market on Tuesday, approaching 10,000 pounds to the dollar and sparking anger in the streets in a country in the midst of economic collapse.

Read also: In Lebanon, exasperation boils over the system

Officially, the local currency remains pegged to the greenback at the rate of 1,507 pounds to the dollar, observed for more than two decades.

But on the black market, since the fall of 2019, it has experienced an unprecedented plunge.

On Tuesday, the dollar traded for 9,900 to 10,000 pounds, several money changers told AFP.

“It's crazy what's going on,”

one said on condition of anonymity.

The greenback has been moving in recent weeks around 8,000-9,000 pounds.

By July 2020, he had already hit 9,800 pounds.

Lebanon is mired in its worst economic crisis, made worse by a political stalemate and the Covid-19 pandemic.

This low of the Lebanese pound angered the streets.

Gatherings were held in several regions of the country, including Beirut, Tripoli (north), Saïda (south) and in Bekaa (east).

Dozens of angry protesters blocked roads, sometimes using burnt tires and overturned dumpsters.

Some have taken up slogans of the "revolution" of October 17, 2019, the date of the start of an unprecedented protest movement against a ruling class unchanged for decades and accused of corruption and incompetence.

"I call on everyone to take to the streets, the situation has become unbearable"

, launched a protester at the microphone of a local channel on the Place des Martyrs in Beirut.

"We will stay here until we bring down this corrupt (political) class headed by (President) Michel Aoun"

, added another, a keffiyeh wrapped around his neck.

"They are starving us"

The fall of the pound comes as the Central Bank (Banque du Liban, BDL) began to assess the financial situation of banks, against the backdrop of international pressure for a restructuring of the banking sector.

Lebanese banks had until Sunday to increase their capital by 20%, one of the measures demanded by the BDL.

According to the daily

Al-Akhbar

, the fall of the pound is partly linked to the withdrawal of dollars from the market by the banks to satisfy the demands of the BDL.

The hashtags #dollar and # marchénoir topped Twitter trends in Lebanon on Tuesday.

Read also: Lebanon: an anti-Hezbollah intellectual shot dead

The depreciation has already led to a drastic increase in prices since 2020 and poverty now affects half of the population.

“They push us to beg, they starve us (...) There was the explosion and they still have not formed a government.

We are fed up with this ruling class, ”

said one protester.

Political stalemate

The country has been waiting for more than six months for the formation of a new cabinet.

The current government resigned after the deadly and devastating August 4 explosion at the Port of Beirut but continues to run day-to-day business.

"The #Lebanon pound is collapsing further - the political stalemate continues and no policies to stem the collapse,"

analyst Maha Yahya of the Carnegie Middle East Center lamented on Twitter.

Read also: In Lebanon, the hospital sector is faltering

The economic crisis in Lebanon is also affecting Syria, where the Syrian pound hit an all-time low on Tuesday as Lebanese banks have long served as a rear base for the country's dollar supply, choked by Western sanctions and ravaged by ten years. of war.