The Lebanese pound on Tuesday continued to tumble against the U.S. dollar on the black market, amid a months-long political deadlock and a failure to form a new government.
The pound is currently trading at 13,850/13,900 to the dollar after its rate hovered between 13,625 and 13,675 late on Monday.
The World Bank said in a damning report released last Tuesday that Lebanon’s economic collapse is likely to rank among the world’s worst financial crises since the mid-19th century.
The report predicts that Lebanon’s economy will shrink by close to 10% in 2021 and stresses there is “no clear turning point in the horizon”.
“The economic and financial crisis is likely to rank in the top 10, possibly top 3, most severe crisis episodes globally since the mid-nineteenth century,” the report added.
Lebanon’s Central Bank (BDL) had announced the launching of Sayrafa, an electronic platform that would allow commercial banks and licensed dealers to trade foreign currency at market rates, after several failed attempts to launch it.
Central Bank governor Riad Salameh said the BDL will sell U.S. dollars to the Lebanese banks that participate in the Sayrafa platform at a rate of 12,000 LBP against the dollar, after previous reports expected the rate to be 10,000 LBP.
The pound had hit a record low of 15,000 in March on the collapse of efforts to form a new cabinet that would promptly enact economic reforms and begin negotiations with international financial organizations.
The local currency has lost nearly 85% of its value over the past 18 months amid a severe economic and financial crisis that has threatened to destabilize the country.