Lebanese pound crashes to 15,000 against dollar as protests continue

The Lebanese pound fell to historic lows on Tuesday hitting 15,000 pounds to the dollar.

Hundreds of people continued to set up impromptu roadblocks in protest against rising prices and deteriorating living conditions.

Officially pegged to the US dollar at 1,507.5, the currency has been losing value since last October. But in less than a month, it has nosedived another 50 per cent.

Christophe Khalil, a university student in his twenties, marched in Downtown Beirut on Saturday after the lira traded at 12,000 to the dollar.

"If this continues I won't be able to afford an education any more," he said. "We are fighting just to have a future in this country."

Inflation has wiped out the purchasing power of those paid in Lebanese pounds, pushing more than half of the population below the poverty line, according to data by the UN.

The minimum wage of 675,000 pounds was equal to $450 before the crisis. It is now worth less than $50.

Saving the Lebanese economy requires drastic reforms demanded by international lenders and donor countries, which the country's leaders have failed to undertake in a year and a half.

These include a forensic audit of the central bank and an overhaul of the electricity sector, which costs Lebanese more than $1 billion annually in a country with daily power cuts.

Researcher Kamal Hamdan, who heads the Consultation and Research Institute in Beirut, said there is nothing to stop the lira from continuing its free fall.

Lebanon’s service economy relies on imports of basic goods such as fuel, wheat and medicine that are paid for in dollars.

"Due to these structural defects, there is no ceiling for the deterioration of the Lebanese pound," he said.

Protesters accuse Lebanon's politicians, who have ruled the country in the past 30 years, of widespread corruption and mismanagement leading up to the crisis.

Demonstrator Michel Labaki said some people were hesitant to join the protests due to the coronavirus pandemic and others still supported the political leaders who brought the country to its knees.

"People are still blinded by their political leaders despite their failures, but we must unite and take to the streets again," the university student said, a Lebanese flag in his hand.

Disputes between political parties have held up government formation for nearly eight months after Prime Minister Hassan Diab resigned after a deadly blast at Beirut's port last August.

The explosion killed more than 200 people, injured about 6,500 and destroyed large parts of the capital. The investigation into its causes has yet to yield any results.

Politicians are failing to reach a compromise on the sharing of ministerial portfolios, blocking government formation at a time of severe crisis.