Struggling banks,which have restricted cash withdrawals since late 2019,were shuttered for a tenth day on Thursday in what they called an “open-ended strike”,following a court case that ruled in favour of a client demanding their trapped savings.
Political paralysis has also made matters worse for the country,without a president since October 2022,and only with a caretaker government with limited functions. Gas shortages and rampant power cuts have also led to the further deterioration of government services and raised worries over the crumbling of public institutions.
Though the country’s pegged exchange rate against the dollar was officially devalued to 15,000 earlier this month,the black market rate has reflected a more realistic market rate for years,but rapidly fluctuates with no transparency.
The currency’s value swings several times daily on some days,leading to businesses pricing their items in dollars and forcing customers to pay ever more in the local currency based on black market rates. Other businesses have started accepting only American US currency. Economists and residents fear Lebanon might move towards the latter,which they call dollarisation.
Caretaker Economy Minister Amin Salam announced a new pricing mechanism for food stores on Friday,where goods will be priced in dollars based on what he described as a “modest” interpretation of the black market rate.
Lebanese authorities for years have failed to curtail the black market’s hold on the currency’s value,even as they have attempted to shut down informal exchange rate websites and mobile applications.