Free-falling Lebanese pound down to new low

The pound dropped for an eighth consecutive day with traders selling the greenback for LL15,600 and buying it for LL15,500

  
A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020.

A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020.

REUTERS/Mohamed Azakir

BEIRUT: The Lebanese pound fell to a new record low for a third straight day Tuesday, trading at LL15,550 against the dollar on the black market.

The pound dropped for an eighth consecutive day with traders selling the greenback for LL15,600 and buying it for LL15,500. It traded at an average of LL15,400 Monday.

Exchange dealers blamed some banks for the high demand for cash dollars on the black market. They said those banks were buying dollars to enable them to implement a Central Bank circular that stipulates paying some cash dollars every month to depositors who had foreign currency accounts before October 2019.

Depositors, locked out of their dollar accounts since late 2019, have been promised some access starting July, with each customer getting $400 in cash and an equivalent in Lebanese pounds at a rate close to market value.

The latest plunge means the pound has lost more than 90 percent of its value on the informal market in past 20 months, in what the World Bank has called one of the worst financial crunches worldwide since the mid-19th century.

Lebanon has been without a fully functioning government for 10 months since the last one stepped down after a deadly port explosion in Beirut last summer.

Politicians from all sides have failed to agree on a line-up for a new Cabinet even as foreign currency cash reserves plummet, causing fuel, electricity and medicine shortages.

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