Lebanese lira plummets to half its official value

A money exchange vendor displays Lebanese pound banknotes at his shop in Beirut, Lebanon. (File photo: Reuters)

The Lebanese pound fell in value Wednesday to more than 3,000 to the dollar on the parallel market, half the official rate, foreign exchange bureaus said.

Lebanon has suffered its worst economic and financial crisis since a 1975-1990 civil war, resulting in recession, a plunge in foreign reserves and rising inflation.

A parallel market for the Lebanese pound emerged last summer for the first time since it was pegged against the greenback at a rate of 1,507 in 1997.

The market rate is now at “3,000 to 3,100 pounds to the US dollar”, two currency dealers told AFP on Wednesday, on condition of anonymity.

A third foreign exchange bureau said it was using an exchange rate of 3,000 to the dollar.

The steep depreciation comes despite the central bank in March attempting to enforce a ceiling for the parallel market at a 30-percent margin to the official rate, or around 2,000 to the dollar.

Banks have since September imposed major restrictions on dollar withdrawals, before they stopped all dollar withdrawals late last month.

Commercial lenders said the closure of airports due to the spread of coronavirus made it impossible to import dollars.

That move provoked a plunge in the value of the local currency on the parallel market.

Banks have been accused of complicity with the political elite in building an unsustainable debt burden that last month saw Lebanon go into sovereign default for the first time.

The country’s public debt is $92 billion, equivalent to 170 percent of GDP, one of the highest levels in the world.

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Last Update: Wednesday, 20 May 2020 KSA 10:02 - GMT 07:02
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