The value of the Lebanese pound falls to historic lows

The Lebanese pound fell to record levels on Thursday to over 35,000 units to the dollar on the black market. The value of the Lebanese currency has gradually plummeted since the legislative elections held in Lebanon on 15 May. At the same time, on the legal foreign exchange market, the pound has remained almost unchanged at 1,500 pounds to the dollar.

The Lebanese currency fell after the results of the elections held just eleven days ago, in which none of the blocs obtained a sufficient majority to govern. This situation suggests that it will be a difficult legislature and that it will have a lengthy start due to the complications in forming a government. Lebanon is already under the command of an interim caretaker government that is seeking a quick transfer of power in order to facilitate an agreement with the International Monetary Fund. 

For the population and international actors, these elections were viewed with optimism as they were expected to be an opportunity for the demands of the protests held in the country in 2019. Demonstrators' demands included an end to political sectarianism and the elites who have been ruling the country since the end of the Lebanese civil war.

As a consequence of Lebanon's poor economic and social situation, popular demonstrations and protests were organised during the autumn of 2019, forming the so-called 'Whatsapp revolution' and culminating in the ousting of Prime Minister Saad Hariri from the government. Despite their apparent success, the mobilisations dissolved due to internal disagreements and repression by the forces of law and order. This situation was compounded by the difficult situation caused by COVID-19 in early 2020, which was used by the elites to quell the protests.

Over the past two years, the Mediterranean country has faced various challenges that have worsened its battered economic situation. The pound has depreciated by more than 100% against the dollar, and inflation in the country has already reached 150%. In addition to the poor economic situation, there is the COVID-19 pandemic and the explosion in the port of Beirut that destroyed half of the city and rendered the port facilities totally unusable. This is particularly serious for a country that relies on maritime trade for its livelihood.

Lebanon is going through a worrying crisis, with 50% of the population living below the poverty line in recent years and 20% suffering from extreme poverty, causing the country's hunger curve to steadily rise. Meanwhile, the population faces shortages of food, fuel, electricity and medicine. Despite this situation, the government has not taken steps to change the situation.

Various international actors have offered to try to unblock the situation in Lebanon, with the intention of gaining leverage from their actions in the Mediterranean country. As a result, Lebanon is expected to become a country at the service of major regional and international powers.