The Lebanese pound is trading on Thursday at 12,175/12,225 against the U.S. dollar on the black market, amid a months-long cabinet stalemate and complete financial meltdown.
According to sources, the U.S. dollar exchange rate would be skyrocketing in the coming weeks in case the concerned parties fail to form a new government and the Central Bank’s new suggested platform is not launched.
Banks have blocked access to dollar deposits, and poverty is spreading but fractious politicians have yet to launch a rescue plan that could allow foreign aid into the country and ward off further economic collapse.
Lebanon’s already dire predicament deepened last August when a blast at Beirut’s port devastated large parts of the city, killing at least 200 people and prompting Prime Minister Hassan Diab’s cabinet to resign.
But his designated successor, veteran politician Saad Hariri, is at loggerheads with President Michel Aoun and has yet to form a new government, which must carry out reforms before it can unlock foreign aid.
The pound remains pegged to the dollar at 1,507.5, but that rate fixed by the central bank remains available only for imports of wheat, medicine and fuel.