Greenback is now Lebanon’s most favourite commodity
Frantic search for dollars as the local currency’s value evaporates
The lines snaked around the block. Then they swelled to fill the whole street, before they turned into a raucous mob of men shoving to the front of the line. There at the exchange bureau, they could buy rationed dollars, the hottest commodity in Lebanon.
The small Mediterranean country’s financial meltdown has thrown Lebanese into a frantic search for dollars as their local currency’s value evaporates. To get the precious hard currency, they must navigate labyrinthine regulations, exploiting any loopholes they can to rescue their earnings.
Every transaction, from doctor fees to store purchases to rent, is negotiated day by day, juggling the tumbling Lebanese pound and multiple, changing dollar exchange rates. Those who can are snapping up luxury goods or real estate, trying to use their dollars trapped in bank accounts frozen by the cash-strapped authorities.
Rising resentment
The turmoil is deepening resentment of the political elite and the once flourishing banking system — and fuelling desperation. Chain retailers have shut down, unable to import or price goods with the fluctuating rates. Some vendors have either closed or only take payment in dollars.
Dollar accounts have been frozen, and those trapped dollars have become “Monopoly money” with no value outside Lebanon, said Dan Azzi, a former banker and analyst. He coined a name for that currency, the “Lollar” or Lebanese dollar.
The peg remains in place officially, even as the black market price of a dollar has spiralled to at least five times that. Meanwhile, authorities imposed rationing on exchange bureaus, limiting how many dollars a person can buy and setting a rate higher than the peg but lower than the black market.