The Lebanese pound has plummeted to its weakest point ever in comparison to the US dollar (80,000 to 1) causing the anguish of citizens whose local currency-denominated savings have been demolished by inflation. The people have been facing more hardship with the ongoing strike of banks against the passage of capital control legislation.
Devaluation of the Lebanese Pound
Various local news reports have noted that Lebanon’s currency lately dropped to an all-time low of 80,000 USD to the US dollar in the unofficial foreign exchange market. The decline at the parallel market happened less than a month after the currency was devalued by more than 90% in the official market.
Although the financial authorities tried to unify different exchange rates for the pound by devaluing the currency from 1,507 to 15,000, some commentators have contended that the new official exchange rate is lower than the rates at which most trading is done.
Meanwhile the recent currency crash has added to the suffering of Lebanese citizens who have seen the country’s high inflation rates erode their pound-denominated savings. As previously reported by Bitcoin.com News, residents of the country have been unable to withdraw their funds since banks froze their accounts.
Capital Control Reforms
The recent strike by the nation’s banks has made matters worse for its people. They are now calling for capital control laws to be enacted to restrict withdrawals of currency from both overseas and domestic sources. The International Monetary Fund (IMF) reached a bailout agreement with the Lebanese government in April 2022, which is anticipated to include capital control reforms before releasing funds.
In response to the action by the banks, the most recent drop in the pound was also announced. Angry Lebanese protesters targeted banks that were closed. In one video shared on social media, incensed Lebanese citizens attempted to set the residence of the president of the Lebanese Banks Association on fire.
Nigerian banks in 🔥 and now also in Lebanon. Economic apartheid suppresses all civilizations. Currency wars are used when this isn’t enough. Humanity The trend is upward. The Revolution has begun. ✊🏽 https://t.co/D9PlFAOArK
— Ray Youssef (@raypaxful) February 17, 2023
On Twitter, certain users shared clips and images of burned bank buildings. Cryptocurrency enthusiasts, however, used the opportunity to express their own. Lebanese banks are trying to keep customers from accessing their funds. This is partially to help them focus on the risks associated with using digital currency issued by central banks.
What are your thoughts? Let us know in the comments section below.
