- Lebanon's currency, the Lebanese pound (LBP), reached a new low on Tuesday, hitting 100K LBP to the US dollar on the parallel market, which operates outside of the official bank rates.1
- The LBP was hovering around 60K to the dollar on the parallel market in late January but has rapidly depreciated since then, as banks went on strike last month over judicial measures against lenders, such as requiring them to honor the old exchange rate when paying out customers' dollar deposits.2
- These measures came after depositors filed lawsuits to retrieve their savings, which they have been largely locked out of since the beginning of the crisis in 2019, as banks imposed informal capital control laws.2
- Sources within the Central Bank of Lebanon (BDL) have confirmed that it will not intervene in the exchange rate via the banks during the strike and will not accept new requests for exchange through Sayrafa, an official exchange platform.3
- The LBP's official dollar rate was adjusted last month to 15K to the dollar as the country has experienced one of the worst economic crises in modern history. It had been pegged to the dollar at a fixed rate of 1.5K to the dollar since the late 1990s.4
- Lebanon is currently without a president — which is reserved for a Maronite Christian — due to political infighting. Hezbollah, an Iranian-backed armed group and political party that's the most powerful force in the country, has said it will support Suleiman Frangieh, who is from an established political family.5
- Narrative A, as provided by The national. The lira is dead, and Lebanon's utterly incompetent political class killed it. It's been over three years since the economic crisis began, and yet there hasn't been a single meaningful reform to the Lebanese economy or banking sector. The ruling elite has no incentive to help Lebanon's people, as they are profiting from the country's continued decline. A new currency will have to be implemented, but no one knows when that may occur.
- Narrative B, as provided by Fdd. Though there are many who like to pretend that all of Lebanon's political forces are to blame for its current problems, there's only one true source of Lebanon's troubles: Hezbollah. Iran now occupies Lebanon with an iron fist, and consequently, the country has been ruined like all the other countries in which Iran has intervened. The situation in Lebanon will only improve once Iran and Hezbollah have been kicked out of the country.