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With the continued rise in the dollar exchange rate, the currency’s decline to its lowest levels in history, and in protest at the deterioration of living conditions and basic services, the boiling and popular anger continues, and several protesters block the roads. in all Lebanese regions.
Angry protesters returned to the streets of the Lebanese capital on Tuesday, blocking roads with burning tires and garbage containers as the country’s financial crisis continued and worsened.
The protests resumed, albeit in smaller numbers, after several days of relative calm, as the Lebanese pound continued its decline, falling to a new low of 15,000 pounds against a dollar on the black market.
Reflecting his frustration at the small number of participants in the demonstrations, Ahmed Shoman shouted: “Where are the people? Come … we are hungry … we are tired!”
In another Beirut neighborhood, small groups of young people, some of them on motorcycles, threw stones at shop windows and asked their owners to close. It was unclear why they demanded this.
The coin has lost 90 percent of its value since October 2019, when anti-government protests broke out, including more than 25 percent in recent weeks alone.
Meanwhile, high-level politicians refused to work together to form a new government that would implement the reforms necessary to lift the country out of the crisis.
On the demonstrations in Lebanon (Archive – Reuters)
Lebanese Acting Prime Minister Hassan Diab said Tuesday that the country could continue to subsidize most basic goods until June, but that fuel for electricity generation will run out by the end of March and efforts are underway to maintain this. subsidy.
Diab’s government has been working on a temporary basis since his resignation after an explosion in the port of Beirut on August 4 destroyed many areas of the capital and killed 200 people.
Lebanon is going through a suffocating financial crisis that represents the greatest threat to its stability since the civil war that broke out between 1975 and 1990.
With dollar flows halted, the Lebanese Central Bank relies on foreign exchange reserves to support three main commodities: wheat, fuel, and medicines, as well as some other commodities.
Diab said in December that the country can use the remaining reserves for support for a period of six months.
The collapse of the currency pushed more than half the population into poverty as prices rose. It has also depleted foreign exchange reserves, raising fears that the Lebanese Central Bank will stop subsidizing some commodities, including fuel, in the coming weeks.
The pound loses 90% of its value
On Tuesday, the Lebanese pound registered a new record deterioration, as the exchange rate against the dollar touched the threshold of 15,000 pounds on the black market, in continuous free fall since the beginning of the economic collapse a year and a half ago.
Thus, the lira has lost around ninety percent of its value against the dollar, while the official exchange rate remains equal to 1507.
Since the summer of 2019, in the wake of the worst economic collapse in Lebanon, the pound has gradually started to fall against the dollar, coinciding with a severe liquidity crisis and the cessation of banks providing depositors with their dollar money.
And after maintaining a rate that ranged between 8,000 and 8,500 per dollar for several weeks, since the beginning of March, the pound began to fall freely, after the exchange rate exceeded the 10,000 threshold, to register the maximum rate on Tuesday. .
The rapid change in the exchange rate in recent days has pushed several supermarkets to close their doors to revalue their products. In addition, factories closed their doors pending exchange rate stability.
A Beirut grocery store hung a note on its front that read: “Closed due to high dollar.”
With the acceleration of the deterioration of the lira, since the beginning of this month, protests have returned to the streets, but only sporadically. On Tuesday, some young people cut the streets by burning tires and wastebaskets.
The need for drastic measures
The new deterioration occurs at a time when the authorities persecute illegal ATMs and online platforms that the Lebanese follow to find out the exchange rate on the black market, in a maneuver criticized by analysts and users of social networks, considering that the problem it is not on the platforms. and the solution requires radical measures from the Bank of Lebanon and the relevant authorities.
Given the shortage of liquidity and the depletion of the Central Bank’s reserves destined to sustain the main consumer goods, experts warn that “the worst has not yet happened,” while political forces are unable to form a government that will succeed.
Last week, the French foreign minister warned that Lebanon was running out of time before its total collapse and blamed the country’s leaders, whose refusal to form a government had exacerbated the crisis.
Deputy US State Department spokeswoman Galina Porter told reporters in Washington on Monday that the United States is concerned about developments in Lebanon and the apparent inaction of the country’s leaders in the face of multiple ongoing crises.
“Political leaders in Lebanon must put aside risky partisan politics and form a government that quickly implements important and long-term reforms, restores investor confidence and saves the country’s economy,” he added.
The Lebanese government resigned in August after a massive explosion in the Beirut port killed 211 people, injured more than 6,000 and damaged entire neighborhoods in the capital.
Disagreements between President Michel Aoun, a Hezbollah ally, and Prime Minister-designate Saad Hariri, who opposes the party, have delayed the formation of the government until now. Hariri was selected for the position in October.
