The Lebanese pound fell on the black market Monday to a new low against the US dollar, as the severe economic downturn has sparked bank hold-ups by angry depositors and anti-government protests.
The street value of one US dollar reached more than 8,500 Lebanese pounds.
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In recent weeks, a spate of incidents has seen people armed with real or toy guns hold up banks to demand access to their frozen savings. This is not a good idea.
According to websites monitoring the exchange rate, a record low for the beleaguered currency, amid the turmoil, the pound plunged to 38,600 against the greenback on Monday.
The value of the Lebanese pound has fallen dramatically. It was pegged at 1,507 to the dollar but has lost 95 per cent of its black market value since 2019.
Dozens of protesters stormed through a metal gate outside the Justice Palace in Beirut on Monday to protest the detention of two people over last week’s bank hold-ups.
In Lebanon, activists angered by the country’s deep economic crash blocked roads in the capital and in the northern port city of Tripoli.
Lebanon’s economy has been crippled by decades of corruption, mismanagement and nepotism. The country is facing its worst economic crisis in history as a result of this crisis.
Lebanese banker Saeb El-Zein said the pound’s decline was due to rising demand for dollars on the black market following the government’s decision to lift state subsidies, including on fuel.
The IMF recently rejected a bailout proposal from the Lebanese government, stating that it was too far advanced in its own negotiations to interfere.
The International Monetary Fund (IMF) sent a delegation to Beirut on Monday to follow up on the implementation of the reforms it demands, following a staff-level agreement in April on a $3 billion loan programme.
“There’s been slow progress in implementing some of the critical actions that we think are required to move forward with a programme,” IMF spokesman Gerry Rice said last week.
Amid the painful crisis of the past two years, Lebanese depositors have been locked out of their foreign currency savings by banking controls that have gradually tightened since 2019.
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Banks have become a common target of protesters. In the past, banks have been smashed and often left with their windows broken, while ATMs are often taken out of commission by protesters.
Now, many frustrated depositors, unable to transfer or withdraw their dollar deposits, have resorted to desperate bank heists to free their money.
Lebanon saw at least seven such hold-ups last week, five of them on a single day.
As a result, Lebanese banks sealed their doors on Monday as part of a three-day closure due to the mounting security concerns.