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Economic crisis

Lira slides toward its weakest rate against the dollar amid economic uncertainty

Lira slides toward its weakest rate against the dollar amid economic uncertainty

Cars wait in line for fuel amid countrywide shortages. (Credit: Marc Fayad)

BEIRUT — The Lebanese lira slid over 7 percent against the US dollar from Tuesday to Wednesday, weakening to more than LL14,500 to the greenback and edging closer to the currency’s lowest-ever nominal value.

As of Wednesday evening, exchangers were buying dollars for LL14,650 and selling them for LL14,700, according to online tracking platforms.

The plunge puts the lira at its weakest since mid-March, when the currency briefly traded at more than LL15,000 to the dollar, leading supermarkets to limit opening hours as they tried to navigate wildly fluctuating rates.

The loss in value against the dollar — nearly 90 percent since the beginning of the financial crisis in 2019 — has had profound effects for the country, which buys most of its goods from abroad in foreign currency. Inflation has soared to triple digits as many workers have either lost their jobs, or are no longer able to make ends meet. Lebanon’s minimum wage, LL675,000 per month, is now worth around $46, around a tenth of what it had been prior to the collapse.

Wednesday’s slide comes the day after Banque du Liban issued a plan to repay depositors whose money has largely been locked away in banks since the beginning of the financial crisis.

Under the repayment plan, depositors would be entitled to withdraw up to $400 in cash dollars per month plus its equivalent in lira at the rate set by the central bank’s Sayrafa platform, currently around LL12,000.

Despite BDL’s announcement, significant uncertainty still surrounds the state of the country’s financial and monetary system.

That uncertainty is underlined by gasoline shortages, causing snarls of traffic throughout the capital this week as cars queue in streets waiting to fill up, and electricity blackouts, which have reached their worst since the crisis of last summer, which only ended in the wake of the devastating Aug. 4 Beirut port explosion.

Both issues are caused by an apparent failure of the state — and BDL in particular — to pay out dollars to subsidize fuel imports. The central bank has also been accused of failing to pay for vital medical supplies.

Last week, BDL announced that it intended to lower the amount of dollars it requires banks to hold at the central bank, potentially freeing up around $1 billion. However, it is unclear how much of that would be used to repay depositors and how much would go toward subsidies of basic necessities.

Meanwhile, Lebanese politicians have proved unable or unwilling to form a government since the last cabinet resigned, following the port blast, on Aug. 10 — 10 months ago tomorrow.


BEIRUT — The Lebanese lira slid over 7 percent against the US dollar from Tuesday to Wednesday, weakening to more than LL14,500 to the greenback and edging closer to the currency’s lowest-ever nominal value.As of Wednesday evening, exchangers were buying dollars for LL14,650 and selling them for LL14,700, according to online tracking platforms.The plunge puts the lira at its weakest since...