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Lebanon pound plummets to all-time low

·3-min read

The Lebanese pound hit an all-time low against the dollar Tuesday, causing dozens to protest a deepening economic crisis that has thrown more than half of the population into poverty.

The pound had been pegged to the dollar at 1,500 since 1997 but the country's worst economic crisis since the 1975-1990 civil war has seen its value plummet.

On Tuesday, it was trading at nearly 10,000 pounds to the dollar on the black market, money exchangers told AFP.

"It's crazy what's happening," one money exchanger said on condition of anonymity.

In the evening, dozens of protesters blocked off roads in Beirut and other parts of the country, some of them burning tyres.

"What is happening is unacceptable... People need to revolt," one of the protesters told a television channel in the capital.

There were also demonstrations in the northern city of Tripoli, southern city of Saida and eastern region of Bekaa.

Before the latest downturn, the pound had briefly stabilised at 8,000-8,500 to the greenback in recent weeks.

In July, it had reached 9,800 to the dollar.

The dizzying depreciation came as the central bank started reviewing Lebanon's banks under international pressure for reform.

Lebanese banks had been given until Sunday to increase their capital by 20 percent, among a series of demands from the bank.

On Monday, a central bank committee "agreed on a roadmap with deadlines for the Bank of Lebanon to take appropriate measures" if these requirements were not met, it said in a statement.

- 'They're starving us' -

Lebanon's Al-Akhbar newspaper said Tuesday that the currency plunge was partly the result of commercial banks sucking dollars out of the market to meet the capital demands of the central bank.

The slide in the value of the pound has led to soaring food prices in a country where more than half of the population now lives below the poverty line.

Lebanon has been without a fully functioning government since outgoing premier Hassan Diab resigned in the wake of a devastating explosion in Beirut port last year.

The blast killed more than 200 people and piled new misery on a country already brought to its knees by the economic crisis.

"They've driven us to begging; they're starving us," a protester said.

"We've been sitting at home for ages, then there was the port blast, and they haven't formed a government. We've had enough of this ruling class."

The hashtags #dollar and #blackmarket were trending in Lebanese Twitter circles Tuesday.

"The exchange rate reached 10,000 LBP (Lebanese pounds) and still no government," said one Twitter user.

Maha Yahya of Carnegie's Middle East Centre echoed the sentiment.

"Meanwhile #Lebanon's Lira (pound) collapses further -- political deadlock continues and no policies to stem the collapse!" she tweeted.

Lebanon was rocked by mass protests in 2019 against a ruling class deemed inept and corrupt, but those demonstrations largely petered out after the coronavirus pandemic arrived in the country.