Lebanon’s Currency Plummets to Record Low as Banks Strike Again

Lebanon’s currency, the pound, plunged to an unprecedented low of 100,000 pounds to the US dollar on Tuesday as the country’s banks went back on strike. This is the latest blow to an economy that has been mired in crisis since 2019, following years of corruption and mismanagement by the political and financial elite.

Three-quarters of Lebanon’s population of over 6 million now live in poverty, and inflation is soaring. The official exchange rate is set by the central bank, Banque du Liban, at 15,000 pounds for $1, but the black market rate is now used for nearly all transactions.

Exchange shops and businesses use rates posted on mobile apps used by private money exchangers, and authorities have failed to shut down the apps or crack down on a suspected ring of exchangers who run the programs.

Many grocery stores, restaurants, and other businesses have opted to start pricing their goods and services in dollars, a move that threatens to push more people into poverty and deepen the crisis.

Lebanese banks imposed informal capital controls in late 2019, restricting cash withdrawals from accounts to avoid folding amid currency shortages. People with dollar accounts could only withdraw small sums in Lebanese pounds, at an exchange rate far lower than that of the black market.

Last month, commercial banks went on an open-ended strike, and angry protesters took to the streets. The banks reopened their doors in late February following caretaker Prime Minister Najib Mikati’s request to do so for people to retrieve their salaries.

On Tuesday, the banks shuttered their doors again to customers and slammed Lebanon’s judiciary for not “correcting flaws” in recent lawsuits against them. Lebanon has also stalled on implementing wide-ranging reforms agreed to with the International Monetary Fund to access $3 billion in a bailout package and unlock funds in development aid to make the economy viable again.