Thu, 29 Jul 2021

Lebanon currency crisis among worst ever, says World Bank

Robert Besser
17 Jun 2021, 20:51 GMT+10

BEIRUT, Lebanon: The embattled Lebanese pound has sunk to a new low of 15,300 against the US dollar in the black market, amid continued political uncertainty in the country and a deepening economic crisis exacerbated by the coronavirus pandemic.

Though officially still valued at 1,515 against the dollar, the Lebanese pound has shed more than 90 percent of its value since anti-government protests erupted in October 2019, the Associated Press reported.

Economists have blamed Lebanon's economic and financial turmoil, which led to it defaulting on debt repayments for the first time in its history in March last year, on decades of corruption and mismanagement.

The latest crash has sent the prices of basic goods spiraling out of reach in the country, which imports more than 80 percent of its basic goods.

Even as it battles rising inflation, Lebanon is facing a crippling shortage of essentials, such as fuel and medicines, and a major power crisis.

Amid electricity cuts lasting entire days, private generator owners have warned they will be unable to cover shortfalls in the state power supply.

Adding to the country's woes is a deepening political crisis, which has delayed the formation of a new government.

The previous prime minister, Hassan Diab, stepped down last year, just days after a blast at Beirut's port killed 211 people. Saad Hariri was named his successor in October.

But the task of forming a government has been in limbo ever since, with Hariri and President Michel Aoun failing to agree on the new cabinet lineup.

Meanwhile, the World Bank, which has warned of a prolonged depression in Lebanon in the absence of political consensus and reforms, has said the nation's current crisis is likely to be among the worst in the world in the past 150 years.

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