Motorists queue in the road on Sunday while waiting to buy gasoline. (Credit: Hussam Shbaro)
BEIRUT — The Lebanese lira broke a new record Monday, depreciating to LL15,500 against the US dollar, as fuel shortages continued to plague the country, causing long lines at gas stations and prolonged power outages.
Lines of vehicles again spilled out onto roads near gas stations, snarling traffic along several main thoroughfares in and around the capital. Fuel importers promised that 12 million liters of gas would be delivered to stations on Monday. This amount, however, would only supply the country’s vehicles for about half a week; the importers said talks with Banque du Liban to find a more sustainable solution were ongoing.
BDL has been blamed for failing to quickly process dollar payments for fuel and medical supplies. Since the beginning of the financial crisis in 2019, the central bank has provided exceptional facilities for imports of basic necessities.
BDL claims it is continuing to process payments, and last week blamed fuel shortages on hoarding. General Security inspected stations in south Lebanon on Monday morning to ensure fuel was indeed being sold.
The subsidy program has been draining about $500 million per month from the central bank’s foreign reserves, according to caretaker Finance Minister Ghazi Wazni, on top of other outbound transfers since 2019. The hemorrhaging dollars has left BDL with around $15 billion, it says, far below what it needs to pay back depositors — let alone defend the lira’s value on exchange markets.
The lira’s record low on Monday came after several days of precipitous drop, finally weakening past the LL15,300 level last seen in mid-March. The currency had remained relatively stable in the mid-12,000s throughout most of April and May.
With the most recent plunge, the lira has now lost more than 90 percent of its precrisis exchange value, leading to triple-digit inflation in the import-dependent country. Despite the severity of the crisis, which the World Bank has termed a “deliberate depression,” politicians and policymakers have failed to enact any major remedies.