by Najia Houssari – arabnews.com — BEIRUT: In less than 24 hours, Lebanon’s currency dropped in value by over 10,000 Lebanese pounds, with the exchange rate nearing 70,000 to the dollar — a plunge that comes at a time when Lebanese were dreading the exchange rate reaching 50,000 to the dollar. Economist Jassem Ajaka told Arab News: “We are following in the footsteps of Venezuela. The central bank’s intervention to stop the local currency from depreciating this fast will not work as long as there is no government action.” Ajaka said he believed that the problem lay in the Lebanese structure, lack of confidence in politics and judges, and the conflict with the international community over Lebanon’s failure to pay its debts. To avoid losses, commercial and service institutions priced their products based on a much higher exchange rate, in anticipation of further devaluation. Such action significantly decreased citizens’ purchasing power.
The price of a 20-liter canister of fuel jumped by 147,000 Lebanese pounds within 24 hours, reaching 1,147,000 LBP ($19 based on the exchange rate of 60,000 LBP/USD), which is equivalent to the salary of a public sector employee. The unstable exchange rate pushed the owners of grocery stores to either close for the day or stop selling certain products. More protesters took to the streets in rural Lebanese areas on Friday, blocking roads with burning tires. The Baalbek International Road was completely cut off in protest against the economic situation. Protesters also blocked Al-Minya International Road in northern Lebanon in both directions, in protest against the deteriorating living conditions. The Ministry of Economy issued a decision raising the price of a big bundle of Arab bread to 29,000 LBP (48 cents). With prices soaring, some taxi drivers opted to stay in one region to avoid wasting fuel in traffic jams, constantly changing their fares depending on the exchange rate.