Lebanese pound hits historic low of 100,000 to dollar: Dealers

AFP , AP , Tuesday 14 Mar 2023

The Lebanese pound sank to a historic low against the dollar on the parallel market Tuesday, foreign exchange dealers said, as banks in the crisis-hit country resumed an open-ended strike.

Lebanon pound
File photo: A protester brandishes a handful of Lebanese currency, which has become virtually worthless, outside the Central Bank. AP


The Lebanese pound, officially pegged at 15,000 to the dollar, was trading at 100,000 against the greenback, dealers said -- a dizzying plunge from 1,507 before the economic crisis hit three years ago, losing as much as 98 percent in value since late 2019.

With the Lebanese economy in shambles and its currency in free fall, businesses are increasingly leaning on one of the world’s most reliable assets — the U.S. dollar — as a way to cope with the worst financial crisis Lebanon's modern history.

As the country felt the impacts of the COVID-19 pandemic, a deadly Beirut port explosion in 2020 and Russia’s invasion Ukraine, its central bank simply printed more currency, eroding its value and causing inflation to soar.

Currency shortages prompted banks to limit withdrawals, trapping millions of people’s savings. It’s led some in desperation to hold up banks to forcibly take back their money.

The damage of the last few years was magnified by decades of economic mismanagement that allowed the government to spend well beyond its means. The head of the country's Central Bank was recently charged with embezzling public funds and other crimes.

Three-quarters of Lebanon's 6 million people have fallen into poverty since the 2019 crisis began. Crippling power cuts and medicine shortages have paralyzed much of public life.

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