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bankingNovember 9, 2022

Lebanese pound surpasses 39,000 again

The Lebanese pound's market value reached again 39,000 against the dollar Tuesday after it had slightly recovered in the past few weeks.

Last month, the dollar exchange rate had dropped from LBP 40,600 to 36,000 on the black market, shortly after Central Bank Governor Riad Salamah said in a statement that the Central Bank would stop buying dollars on the Sayrafa platform.

Few days after Salameh's statement, the dollar started rising again until it exceeded 39,000 on Tuesday.

The country is now led by a caretaker government and a divided parliament that has repeatedly failed to reach a consensus on a new president amid an unprecedented financial and political turmoil.

The Lebanese pound has been officially pegged at 1,507 to the dollar since 1997, a rate that has not reflected its true market value for years as the currency has been in free fall, with multiple parallel exchange rates coexisting.

After years of economic mismanagement and endemic corruption, Lebanon sunk into an unprecedented financial crisis in late 2019, dubbed by the World Bank as one of the world's worst in recent history.

The crisis has pushed most Lebanese into poverty, while talks with the International Monetary Fund to unlock billions of dollars in loans have stalled as Lebanese leaders have been unable to enact most reforms demanded by the lender and donor countries.