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The State of the Lebanese Pound

shadow1

Legendary Member
Orange Room Supporter
Pretty much the rats are now leaving a sinking ship. In any decent or indecent country, banks in a financial state like the Lebanese banks would be declared insolvent and shut down. The only reason this hasn't been done here is how can you tell the hundreds of thousands of Lebanese all their wealth has evaporated in full. The banking system in Lebanon is dead and what everyone is waiting for is for the announcement on the radio. Who could have imagined a year ago the country would unravel so quickly? Even I couldnt see the speed of it even though I knew it was coming. And to think we are only in the first three months of a thirty year journey is frightening.
I doubt there has ever been a country in the history of the world in this horrid situation while its rulers remain comatose and as popular as ever. Why should they care? Their wealth has been transferred overseas and apres moi le deluge.

Ma bounia 3ala batil fahwa batel.
 

TayyarBeino

Legendary Member
وطنية - صدر عن حاكم مصرف لبنان رياض سلامة البيان الآتي:

"انطلق اليوم العمل في المنصة الالكترونية لعمليات الصرافة للتداول في العملات بين الدولار الاميركي والليرة اللبنانية لدى الصرافين عبر التطبيق الالكتروني المسمى
"Sayrafa"
. وكان تداول الاسعار اليوم بحدود 3850 - 3900 ليرة للدولار الواحد. وقد تأمنت السيولة على هذه الاسعار وجرت العمليات على أساسها.

يبقى سعر الصرف الرسمي في المصارف على 1515 ليرة لبنانية مقابل الدولار. اما الاسعار، التي يتم تداولها عبر الاعلام ووسائل التواصل الاجتماعي بما يسمى السوق السوداء، فلا علاقة لمصرف لبنان بها ولا مسؤولية عليه. وبكل الاحوال فإن حجم المبالغ المتداولة عبرها ضئيل".
 

TayyarBeino

Legendary Member
its even lower to about 7000-7300...

تدهور سعر صرف الدولار في السوق السوداء ليسجل 8000 للمبيع و 8100 لشراء، 3800 ليرة للتحويلات من الخارج، 3850 مبيع و 3900 شراء عند الصرافين
 

Nonan

Legendary Member
Orange Room Supporter
its even lower to about 7000-7300...

تدهور سعر صرف الدولار في السوق السوداء ليسجل 8000 للمبيع و 8100 لشراء، 3800 ليرة للتحويلات من الخارج، 3850 مبيع و 3900 شراء عند الصرافين
Eh khalas, inHallit. We don’t need the audit anymore
 

Picasso

Legendary Member
Orange Room Supporter
We Lebanese Thought We Could Survive Anything. We Were Wrong.

The myth of their resilience helped the Lebanese function despite a miserably corrupt and inept state. No longer.

By Lina Mounzer

BEIRUT — Anyone who knows Lebanon has heard this: The Lebanese are resilient. A reputation earned by weathering an outsize list of challenges over the years: a 15-year civil war, political tensions with Syria, wars with Israel and a collapsing public service infrastructure.

Economic collapse, exacerbated by a coronavirus lockdown in March, is the latest disaster to befall the Lebanese people. Years of financial maneuvering and debt mismanagement by the government, the banks and the central bank led to a depletion of the country’s foreign currency reserves, which caused depreciation of the Lebanese pound — long pegged to the dollar — by more than 80 percent since October.

People have lost their life savings overnight, and prices of food and basic goods have inflated over 50 percent for the third month in a row, making Lebanon the first country in the Middle East and North Africa region to experience hyperinflation.

Lebanon’s economy is based on services; the country produces little and imports a lot. The plummeting value of the Lebanese lira and the lack of access to dollars means many stores can’t afford to remain open. Salaries that haven’t been slashed outright have lost their spending power. Tourism, once one of the pillars of the economy, has been severely hit in recent months from the worsening political and economic situation and the enforced pandemic lockdown.

Nearly 1,000 restaurants have been forced to close, and 25,000 people have lost their jobs in the restaurant sector alone. Remittances, which once brought enough dollars into the country to help offset the budget deficit, have been on the wane for some years now because of lower oil prices in the Gulf, where many Lebanese work. Data for 2020 is still not in, but remittances are set to dwindle more as a lack of trust in the banks and travel restrictions mean money cannot find its way into the country either through bank or in-person transfers.

The cumulative effect of these factors is that much of the middle class — about 3.25 million people, or 65 percent of the country — has slipped into poverty. The poor are now destitute, near starvation. Once again, people must scramble to find solutions for the government’s ills.

Facebook barter groups have sprung up, with people seeking to exchange whatever they have, in order to secure what they so desperately need: fancy dresses for baby formula; a set of drinking glasses for a bag of rice. One man held up a pharmacy for diapers. Another mugged someone at knife point only to return, sobbing and apologizing that he is unable to feed his family, that he’s only doing this to survive.

While the mass protests that erupted on Oct. 17, 2019 — against the corruption of the ruling elite and the sectarian system they uphold — succeeded in toppling the government, the new government appointed in its place has done little to alleviate or address worsening living conditions.

Misery is now palpable across the country, in the rows of shuttered shops, in the garbage piling up in different neighborhoods as basic services are disrupted, and in the darkness of the nighttime streets of Beirut as electricity cuts soar to 20 hours a day.

It is hard to imagine that this is the same Beirut that has seen so many odes to the unparalleled revelry of its bar scene — the favorite subject and haunt of many a Western journalist — written in every major newspaper.

Those articles repeatedly peddled the same myth that we are so eager to believe about ourselves: The Lebanese know how to dance while the bullets fly, how to repurpose even war bunkers into nightclubs, how to find a way around every shortage, because the Lebanese are resourceful and resilient. It is an idea that has served both as consolation for difficult living conditions and a point of pride for how efficiently we manage them.

But now it has become clear that there is nothing truly resilient about Lebanon except its politicians and ancient warlords, who refuse to step down, even after their profiteering has bankrupted the country and its people. And while Lebanese banks have long been deemed resilient by economists, the current situation reveals that this designation belongs only to the bankers themselves.

Even the International Monetary Fund, the so-called “lender of last resort,” cannot bring the banks to agree on the audit of financial losses required to unlock a loan. Two high-ranking officials have so far resigned over the stalled negotiations. One of them, Alain Bifani, a former director general of the Finance Ministry, revealed that bankers smuggled close to $6 billion outside the country while preventing small depositors from withdrawing so much as $100.

Christine Tohme is the curator and founder of Ashkal Alwan, an organization that supports local art and cultural production. She started operating it out of her car in 1993, two years after the end of the civil war. Over the last 27 years, despite a lack of state funding, the organization ran a prestigious art study program that sees applicants from across the world. This year, the program was forced to end early when funds meant for students were seized by the banks. “We all worked so hard to make things better, and look where we are now,” said Ms. Tohme. “I am so sad about not being able to dream or see into a future. I am exhausted.”

That exhaustion is heavy in the voices and faces of everyone I encounter. Perhaps resilience has always been the lie we have been fed and that we continue to tell ourselves in order to keep functioning under a state so corrupt it cannot provide a bare minimum of public or social services.

A state that thinks so little of its people that it bickered over the pittance of financial aid it promised to hungry families during the pandemic until devaluation reduced the worth of the aid that each family was getting from $180 to about $50. And then it was never distributed.

But the protests late last year were evidence that refusing to accept resilience is also a refusal to accept the conditions that made it necessary for us to rely on the idea in the first place. A refusal to find private solutions to problems that should rightfully be solved by the state. If things seem bleak now, at least there is this: We have finally come to recognize that a myth is poor consolation for a half-lived life, no matter how attractive that myth might be.

Lina Mounzer is a Lebanese writer and translator.

NYTimes
 

Raficoo

Well-Known Member
Just got my generator bill, and they're charging 650 L.L/kWh, plus they increased the base fixed price per amperage!
If you do the math, that's basically the equivalent of paying $0.43/kWh for the non-dollar holder, which would imply we have the most expensive electrical supply service on the planet, even surpassing the price of electricity in the most expensive countries like Denmark or Germany!

I just hope this kWh price is a one time result of the crazy diesel supply story back in July and that it will go down for this month, but I'm not so optimistic these days.
 

Danny Z

Legendary Member
Just got my generator bill, and they're charging 650 L.L/kWh, plus they increased the base fixed price per amperage!
If you do the math, that's basically the equivalent of paying $0.43/kWh for the non-dollar holder, which would imply we have the most expensive electrical supply service on the planet, even surpassing the price of electricity in the most expensive countries like Denmark or Germany!

I just hope this kWh price is a one time result of the crazy diesel supply story back in July and that it will go down for this month, but I'm not so optimistic these days.
The only reason the utilities are government owned even in the staunchest Capitalistic economies is that this technology can be best leverage by the the economy of scale. So water and hydro even in the US are serviced by the state. a small generator in a neighbourhood is way less efficient than a utility... but in Lebanon the state cannot function so these guys mushroomed to fill a gap that the state could not fill.
By the way you used 1,500 a rate while if you use the real rate of 8000 the number is really low is like 8 cents KWhr which is in line with the cheapest rate in the world. For example The average price in California is 16.7 cents per kWh
 
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shadow1

Legendary Member
Orange Room Supporter
We Lebanese Thought We Could Survive Anything. We Were Wrong.

The myth of their resilience helped the Lebanese function despite a miserably corrupt and inept state. No longer.

By Lina Mounzer



But the protests late last year were evidence that refusing to accept resilience is also a refusal to accept the conditions that made it necessary for us to rely on the idea in the first place. A refusal to find private solutions to problems that should rightfully be solved by the state. If things seem bleak now, at least there is this: We have finally come to recognize that a myth is poor consolation for a half-lived life, no matter how attractive that myth might be.

Lina Mounzer is a Lebanese writer and translator.

NYTimes
A brilliant conclusion. If only it weren't in hindsight.
 

Raficoo

Well-Known Member
By the way you used 1,500 a rate while if you use the real rate of 8000 the number is really low is like 8 cents KWhr which is in line with the cheapest rate in the world. For example The average price in California is 16.7 cents per kWh
This is specifically why I mentioned "non-dollar holder". Yes, for the people who were smart enough to convert all their Liras to Dollars before capital controls and the start of the crisis, and also for expatriates coming back/visiting with foreign cash in their accounts, then it's super cheap, but on the other side of the fence lies a huge portion of the population who were earning nothing but Lebanese Liras and their livelihoods have been demolished by the 80% devaluation. So as much as I wants to say "wow we're really so lucky to have such a cheap rate for x/y/z since $1 = 8000 L.L", this doesn't apply here unless everyone in the country suddenly had dollars.
 

Danny Z

Legendary Member
This is specifically why I mentioned "non-dollar holder". Yes, for the people who were smart enough to convert all their Liras to Dollars before capital controls and the start of the crisis, and also for expatriates coming back/visiting with foreign cash in their accounts, then it's super cheap, but on the other side of the fence lies a huge portion of the population who were earning nothing but Lebanese Liras and their livelihoods have been demolished by the 80% devaluation. So as much as I wants to say "wow we're really so lucky to have such a cheap rate for x/y/z since $1 = 8000 L.L", this doesn't apply here unless everyone in the country suddenly had dollars.
Well in this case look at Kenya their GDP per capita is 1000$ their price is 22c per kwhr.
Lebanon before the crisis the GPD per capita was 8,500$ let's say it is $850 now ten times less with the loss of value of money the rates is 8c so it is still cheaper than Kenya even per capita compared. Electricity price and per capita income is is a non measure. That's not what makes it hard for Lebanese. It is more the lack of access to electricity, coupled with lack of access to fuel because of corruption. There are also a lot of things still cheaper than other part of the world. But the problem is not that, it is sudden hyper inflation which makes the people not being able to cope with inflation and adjust to it as they do in other countries. Problems also lie in the disparity in income between poor and rich. The rich never invested they just funneled money out when they could and made a lot of interests with the help of corrupt banks, lost a lot but kept a lot too, the poor never had any money in the first place now they earn merely cents and the ones in the middle are now poor earning merely a $100 month. That is what people should have been earnng for a long time, like in China before the boom. If that was the case then the rich would have invested in lebanon because it has low wages, Lebanon would have had growth in manufacturing and exported goods and income to the country would come more companies will join the hype and growth will provide higher incomes et so on and so forth and you get a manufacturing revolution like in China, India, Taiwan in the eighties etc. Lebanon's case. Electricity will eventually still remain a non issue if there is no corruption.
 

SoFP1

The Chosen One
Orange Room Supporter
Get ready for $0 at the BDL.

Bread, fuel and Medication/hospitalization prices are going to go off the hook. Prices are going to rise 4.5 times at the least, that's if USD black market price stays at 7,000. I think it would surpass the 15,000 easily because of the huge increase in demand for the $ in order to purchase huge amounts of fuel, wheat and meds.

 
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