Lebanese economy plunges to new lows
The Lebanese pound fell to a fresh low against greenback trading in the low 1,500 versus the US dollar range on Sunday. The Lebanese currency has been in a downward spiral since 2019 as the pound has lost 90% of its value since then. Lebanese citizens are reportedly facing shortages of basic goods such as food and medicine as certificates state that “the shortage has worsened across the board”.
The Lebanese pound fell to a new low against the greenback, and the country’s currency system collapsed
By June 2021, the Lebanese pound (LPB) fell to 1,501 against the US dollar, or LBP 0.00066 per USD. The country’s economic crisis that began in 2019 has further devastated the Lebanese economy.
In essence, after the civil war, the Lebanese government spent too much reserves, used foreign aid and “balanced its books with income from tourism”. The country’s leaders took out loans to build skyscrapers, restaurants and designer boutiques, luxury shopping malls, and more. It was reportedly so bad after the civil war that economists dubbed Lebanon’s financial system a “nationally regulated Ponzi scheme”.
“The Deliberate Depression” is perhaps the most accurate description of Lebanon’s unprecedented economic collapse.
Political inaction is no accident. Political inaction is a political choice.
– Mohamad Faour فاعور (@ Mohdfaour89) June 13, 2021
The latest Reuters reports on Sunday show that the country’s economy is in deep turmoil, showing that Beirut’s electrical plants cannot even keep the grid running on a regular basis. Other accounts scattered across social media tell the deteriorating story of Lebanon’s current financial crisis.
“The social fabric of Lebanon is changing rapidly: people fall into poverty, those who can leave the country, and there are those who earn money on the back of others. This crisis is worse than it was in the 1980s when the Lebanese economy collapsed, ”says one person tweeted this week about the situation.
“Already complicit in this economic collapse due to years of corruption and mismanagement, #Lebanon‘s leaders were berated for their limited response.
– Meray | (@MerayMaddah) June 11, 2021
“Times are tough in Lebanon; the economy is in ruins; People are concerned ”, another report on the economic situation in Lebanon details.
A group that discusses the “ongoing socio-economic talks” is called “The democratic economy“Asked his Twitter followers about the situation. The account asked its followers if they thought the introduction of cryptocurrencies as a possible solution to Lebanon’s economic problems was a good idea. The Twitter account @Democraticecon said:
With the financial crisis and the collapse of the monetary system in Lebanon, people are looking for alternative systems to banks and solutions to the current crisis. One of the suggested scenarios is the use of digital currencies. What about cryptocurrency?
Lebanese gas stations empty, pharmacies on strike, electricity companies cannot keep the electricity grid running, dollar accounts are still frozen
“Petrol stations in Lebanon are going out of business,” one person continues wrote on Friday. Reuters confirms the problems with gas stations, noting that there are long lines at existing gas stations and fights are beginning over who can fill up their cars first. Pharmacies are closed due to a lack of medication and some hospitals only choose to provide emergency services.
Lebanese Prime Minister-designate Saad al-Hariri and President Michel Aoun tried to address the situation. But both leaders struggled to maintain political rule after numerous Lebanese officials resigned after the port of Beirut exploded in August.
Protests in #Lebanon Condemnation of the economic collapse and a pharmacy strike. pic.twitter.com/Yn0bDOrDpp
– Jamaila (@jamaila_morgan) June 12, 2021
In addition, people were concerned about the country’s solvency problems as Lebanese banks locked depositors from their dollar accounts last year. Then the central bank said funds as high as £ 3,900 per dollar could be withdrawn. Investors with USD have been promised that they could get better access to their funds in the next month.
“The Lebanese people are held hostage by the Iranian militia”
Meeting with Minister and Major General Ashraf Rifi @Ashraf_Rifi
About Iran’s invasion of Lebanon, the economic collapse and Lebanon’s relations with the Gulf
Via: Dr. @tarekchindeb https://t.co/x0mpZXtJVl– Koh Nagao (@KohNagao) June 5, 2021
Funds could be withdrawn at a rate that is not exactly the global average, but much closer than the previously allowed one-third withdrawal offer. However, the International Monetary Fund (IMF) on Thursday denounced Lebanon’s withdrawal system for dollar deposits and stressed the need for the country to revise its economic policies and implement broader reforms.
While Lebanese officials court the IMF, the citizens go without Manoucheh
Looking to negotiate with Lebanon, the IMF believes the country’s looming capital control law and dollar deposit withdrawal proposal could result in significantly higher inflation. Meanwhile, much of these negotiations with the IMF are essentially just bureaucrats and Lebanese wealthy individuals.
The majority of the nation is drowning in infrastructure problems as the nation’s residents cannot even afford basic things like clean water and manoucheh. According to reports, even in the most affluent neighborhoods of Beirut, small manoucheh furns (bakeries) cannot stay in business because no one has money. The country’s rich, apart from the current bureaucrats who run the nation-state, have long since left Lebanon.
What do you think of the problems that the Lebanese pound is depreciating significantly against the US dollar this week? Let us know what you think on this matter in the comments below.
Photo credits: Shutterstock, Pixabay, Wiki Commons, Twitter,
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
source https://bidsfor.me/lebanese-economy-plunges-to-new-lows/
Comments
Post a Comment