The U.S. dollar exchange rate in Lebanon has spiraled out of control as the country’s pound currency continues to tumble to new record lows.
The pound dropped on Tuesday to an all-time low with exchange rates of 14,900/15,000 pounds against the U.S. dollar on the black market.
The pound was traded in the morning at a rate hovering between 13,700 and 13,800 to the dollar.
Numerous shops and supermarkets across the country have closed as they are unable to keep pace with the fluctuating prices of commodities in light the high USD exchange rate.
Shops in Sidon’s market closed yesterday and placed small stickers on their doors which read “it’s closed because we don’t want to raise prices.”
The new slump in the pound, which had hit 10,000 LBP last week, broke a semi-stable margin of around 8,000/8,500 LBP against USD, prompting citizens to block roads with burning tires, venting their anger at the deteriorating economic situation.
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.
Lebanese banks had raised the exchange rate from 1,507.5 to 3,850 pounds per dollar for withdrawals from U.S. dollar accounts as a liquidity crunch erodes the currency’s value.
Crushed under a mountain of debt, Lebanon is grappling with a financial crisis that has wiped out jobs, raised warnings of growing hunger and locked people out of their bank deposits.
The collapse of the Lebanese pound which has slashed about 90% of its value comes amid mounting divisions between politicians and while prime minister-designate Saad Hariri remains at loggerheads with President Michel Aoun.