31 May Report: Lebanese Pound Exchange Rate Against Dollar Plunges to All-Time Low
After relative calm for a few months, the Lebanese pound has plunged to an all-time low of 35,600 per dollar, a report has said. The currency’s latest slide is expected to worsen Lebanon’s economic challenges.
In a sign that Lebanon’s ongoing economic crisis is worsening, the black market exchange rate of the Lebanese pound is reported to have plunged to an all-time low of 35,600 against the dollar. According to an Al Jazeera report, it took just two weeks for the pound’s black market exchange rate to drop from 26,800 to the latest rate. At the time of writing, the pound’s official exchange rate was 1,510 for every dollar.
The pound’s reported quickfire depreciation has worsened Lebanon’s already difficult economic situation. Also as noted in an Al Jazeera report, the currency’s plunge was preceded by a 25% increase in petrol prices. Plans to scrap subsidies — which in turn can lead to further price increases — are expected to worsen the plight of the country’s residents.
While authorities in Lebanon have blamed the rising global inflation, some experts believe domestic reasons are largely to blame for the country’s deteriorating situation.
One of the experts, financial adviser Michel Kozah, explained: “When global prices change, Lebanon is not hit once, but twice. It’s because we cannot protect the value of the Lebanese pound.”
While Lebanon was briefly successful in halting the pound’s slide earlier in the year, the country’s limited resources meant its policy of defending the pound could not be sustained, the report said.
Meanwhile, one of the country’s newly elected politicians, Mark Daou, is quoted in the report insisting that Lebanon can only escape its present predicament if it institutes reforms.
“Financial reforms like capital controls, banking secrecy, judicial independence and a few others are fundamental for regaining trust and stabilising the markets,” Daou explained.
The politician added that the country needed to implement the reforms as this was the only way it can qualify for an International Monetary Fund (IMF) financial bailout.
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