A money changer handling dollar bills in Lebanon. (Credit: Joseph Eid/AFP)
BEIRUT — The Lebanese lira hit a new low against the US dollar on the parallel market Monday, a drop that coincides with the closure of banks, following of a spate of bank holdups by angry customers in recent days.
According to websites monitoring the exchange rate, the lira was trading in the afternoon at over LL39,000 to the greenback.
Since 2019, Lebanon has been plunged into an unprecedented socio-economic crisis largely blamed on the corruption and mismanagement of the decades-old ruling class.
Officially fixed since 1997 at a rate of LL1,500 to the dollar, the local currency has lost 95 percent of its value since 2019. And since late 2019, banks have imposed unprecedented draconian restrictions, preventing savers from withdrawing their money, namely in foreign currencies.
Unable to withdraw their money in dollars, depositors have resorted to holdups to claim their savings, including several in a single day last week. As a result, the Association of Banks in Lebanon ordered the closure of all branches for three days starting Monday.
Four out of five Lebanese are now living below the poverty line according to the UN, a pauperization accelerated by triple-digit inflation. The prices of fuel and several basic necessities — which are no longer subsidized by the authorities — are constantly rising.
Despite the social and economic decline in the country, the ruling class has continued to block the reforms that foreign donors have made a condition of any financial rescue package. A delegation from the International Monetary Fund is expected in Lebanon on Monday after a preliminary agreement was reached earlier this year to provide $3 billion in aid over four years.