Beirut: The Lebanese currency reached a new low against the dollar on the black market on Monday and continued its free fall in a country gripped by political stalemate, an economic crisis and growing deficits. The pound, which has been officially pegged to the U.S. dollar since 1997, sold for 15,400-15,500 to the greenback on the black market, several money changers said. After hovering around 15,000 against the dollar in mid-March, the official exchange rate dropped to between 12,000 and 13,000 later that month before rising again in recent days. The latest jump means that the pound has lost more than 90 percent of its value in the informal market since October 2019, in what the World Bank calls one of the worst financial woes worldwide since the mid-19th century. Lebanon has been without a fully functioning government for ten months since the last one stepped down after a deadly port explosion in Beirut last summer. Politicians on all sides have failed to put together a new cabinet, although cash reserves in foreign currency are declining, causing fuel, electricity and medicine shortages.
In recent days, frustrated drivers have been waiting for hours in long cars outside filling stations to fill up their tanks. Pharmacies went on strike on Friday and Saturday in protest of the central bank allegedly not providing dollars as a preferred exchange rate so they could continue working. Electricity outages have increased as the state struggles to get enough fuel to operate power stations. People earning salaries in Lebanese pounds have seen their purchasing power drastically decrease as they struggle to keep up with price increases. The country, where more than half the population now lives in poverty, is in dire need of financial aid, but the international community has conditioned such aid on the formation of a new government to launch comprehensive reforms.