BEIRUT: The Lebanese pound hit a new record low on the black market for a second straight day Monday, trading at LL15,400 against the dollar, as efforts to form a new government appeared to have collapsed.
The pound dropped for a seventh consecutive day with traders selling the greenback for LL15,450 and buying it for LL15,350. It traded at an average of LL15,300 Sunday, a record low.
The pound had hit a low of 15,100 in March and the local currency has now lost 90 percent of its value since late 2019 with no end in sight for the financial meltdown.
Foreign reserves, used to fund a subsidy program for basic goods including fuel, medicine and wheat, are running out and shortages have been worsening across the board in recent weeks.
Some hospitals are ruling out elective procedures and only performing emergency surgeries to ration what is left of medical supplies. Most pharmacies staged a two-day strike this week as medications run out and hourslong car queues for gasoline have frustrated motorists causing squabbles.
The financial collapse is taking place against a backdrop of fractious politicians bickering over Cabinet formation.
Prime Minister-designate Saad Hariri appears set to step down this week in a move reflecting his frustration with the continued obstruction by President Michel Aoun and MP Gebran Bassil of his attempts to form a new government to enact reforms and avert total economic collapse. The former government has continued in a caretaker capacity after having resigned in the aftermath of the Aug. 4 Beirut Port blast.
Depositors, locked out of their dollar accounts since last year, 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.
But the International Monetary Fund last week criticized the proposal for dollar deposit withdrawals and a capital control law yet to be approved by Parliament saying both measures would only be meaningful as part of broader reforms.
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