A money changer in Beirut in Sept. 2022. (Credit: Anwar Amro/AFP)
BEIRUT — The Lebanese lira continued its tumble on the parallel market on Tuesday, exceeding LL54,000 against the US dollar, according to several mobile tracking applications.
This new low stirred anger in the streets of different regions, according to the National News Agency and L'Orient Today's local correspondents.
According to the Lirarate.org platform, the dollar was trading at LL54,600 to buy and at LL54,500 to sell as of 3:30 p.m.
The gap between the parallel market rate and that of the Sayrafa platform (LL38,000 to the dollar since last week), designed by Banque du Liban to try to stabilize the exchange rate, now stands at around LL16,000.
Lebanon's national currency has lost more than 97 percent of its value in the past three years of unprecedented economic crisis in the country. Lebanese authorities continue to stall the adoption of the necessary reforms to curb the country's economic and financial collapse.
The lira's latest free fall has caused a sharp increase in fuel prices and brought angry protesters to the streets.
In the neighborhood of Chiyah to the south of Beirut, "young demonstrators" blocked the road in the late morning, according to the NNA.
In North Lebanon, the main highway was blocked in both directions just outside Tripoli, the poorest city in Lebanon.
Lack of confidence and stalled reforms
"The recent depreciation of the exchange rate is related to the lack of confidence amid the presidential vacuum and in the absence of a fully fledged cabinet, while reforms have been stalled, putting at stake the potential final agreement with the International Monetary Fund," Marwan Barakat, head of the research department at Bank Audi, told L'Orient-Le Jour.
"I think in the absence of an IMF program that will overview reforms that are apt to restore equilibrium between the lira stock of money and the FX [foreign exchange] stock of money, the exchange rate is likely to maintain its volatile behavior," Barakat added.
"If the current political and economic status quo continues to prevail throughout 2023, it is likely that the lira to dollar exchange rate will double at the end-of-year horizon, with [a] corollary three-digit inflation rate for the fourth year in a row, thus exerting huge socio-economic pressures on Lebanese households," Barakat said.
"Also there is the factor related to the spillover effects of anticipated monetary policy, with the banking exchange rates expected to move to LL15,000 to the US dollar by Feb. 1," Barakat added.
