The drop of the Lebanese pound: is the country on the way to economic collapse?

The drop of the Lebanese pound: is the country on the way to economic collapse?

On the way to collapse? Against the background of the severe economic crisis, and the drop of the lira, the International Monetary Fund warned last night that “Lebanon is in a very dangerous situation”. According to the fund’s representative in the country, Ernesto Rigo“The reforms are being carried out quite slowly, the situation is very complex and the country is going through a crisis that is suffocating it.”

Rigo also stated that “we expected the government in Beirut to implement the financial reforms, and we are calling on it at this moment to speed up their implementation.” The UN envoy in the country added that “we see a high rate of poverty and unemployment in the country, and many cannot access their money in the banks.” The dire warnings come against the backdrop of the IMF’s attempts to discuss the economic aid program with officials in the Lebanese government. At the end of last year, the government began Register the negotiations with the fund on the economic recovery plan.

At the same time, during the last week there were demonstrations in Beirut against the growing economic collapse of the land of cedars. Last Wednesday there was a protest, in which retired military officers also participated, against the background of the limit imposed by the local banks on their savings. This, after the banks imposed informal capital controls against the backdrop of the worst financial crisis in the country’s history. The protest quickly turned violent, after the protesters threw stones at the police, who responded with measures to disperse the protests.

In the meantime, Muhammad al-Khatib, a former officer who served 32 years in the Lebanese army, spoke to the Al-Jazeera network and shared about the difficult situation in Lebanon: “The political and business elite do not want to solve the crisis, because that would include economic reforms and the fight against corruption. If the elite do this, they will lose control of the country and its most important resource. The crisis has led to school closures and left families without food, and unable to pay for basic goods. Our children are hungry, and we are hungry. We left the army with nothing, no health care and no Welfare”.

Since 2019, the Lebanese pound has lost about 98% of its value against the dollar. Last Tuesday, the Lebanese pound reached a new low, when the representative exchange rate was only 15 thousand pounds to one dollar.


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