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Asharq Al-Awsat
Asharq Al-Awsat
Asharq A-Awsat

Lebanese Pound Sinks to Record Low as Deadlock Persists

A money exchange vendor displays Lebanese pound banknotes at his shop in Beirut, Lebanon, November 25, 2021. REUTERS/Mohamed Azakir

The Lebanese pound on Thursday hit a new record low of 50,000 pounds per US dollar, marking a loss in value of more than 95% since the country's financial system imploded in 2019.

The pound was pegged to the dollar at a rate of 1,507 in 1993, a peg that held until 2019, when decades of profligate spending, mismanagement and corruption triggered a financial crisis.

The largest bill in circulation, the 100,000 pound note formerly worth $67, is now worth just $2.

The Lebanese pound's plunge comes days after a European judicial delegation from France, Germany, and Luxembourg landed in Beirut to interrogate embattled Central Bank Governor Riad Salameh and a dozen affiliates in a European money laundering investigation of some $330 million. They so far have questioned banking officials and former central bank officials. Switzerland and Liechtenstein have also opened probes against Salameh for money laundering allegations.

Lebanon's deeply-divided parliament is meanwhile in flux. It has continuously failed to agree on a new head of state since President Michel Aoun's six-year term ended on Oct. 30. All but 18 of the Parliament's 128 legislators showed up Thursday, with most — 71 lawmakers — voting either for parliamentarian Michel Moawad, an outspoken critic of Iran-backed Hezbollah, or casting blank ballots.

The worsening political paralysis has left the country without a president and only a caretaker government, stalling a host of economic reforms aimed at stopping wasteful spending and combating rampant corruption.

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