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Lebanon is bankrupt and its exchange rate has plummeted by 96%

Lebanon is bankrupt and its exchange rate has plummeted by 96% 



On December 20, local time, the black market exchange rate of the Lebanese pound fell below 45,000 to the US dollar, a record low. Lebanon has pegged its currency, the Lebanese pound, to the US dollar since 1997. The official rate has remained at 1,507.5 to 1. Since the banking crisis in September 2019, the black market exchange rate of the Le pound has depreciated rapidly against the US dollar.


In the past three years, the black market exchange rate of the Li pound against the US dollar has fallen by more than 96% due to the combination of political and economic factors, the COVID-19 pandemic and the massive explosion in Beirut port. In recent years, Lebanon's economy has remained sluggish, with high public debt and high unemployment. Since the end of 2019, Lebanon has been in a severe financial crisis, and the Lebanese currency began to depreciate and the black market exchange rate against the US dollar fell sharply. Defaulting on debt amounts to 170% of GDP about $90 billion.


Lebanon has one of the highest debts in the world. The World Bank said Lebanon was in its worst crisis in more than 150 years, as the value of the Lebanese pound fell by nearly 90 percent. It also expects business risks to rise further as the political and economic situation in Lebanon deteriorates.


On April 4, 2022, Lebanese Deputy Prime Minister Saad Shami announced that Lebanon's central bank and government are bankrupt. Lebanon imports more than 80 percent of its goods, and a falling currency has sent prices soaring, leading to severe shortages.


For the current social and economic situation of Lebanon, especially in the current situation of the collapse of the exchange rate, the devaluation of the local currency and the high risk of the economy, some importers' production and business activities are affected by the national social turmoil and the shortage of dollars in the country due to the plummeting exchange rate, resulting in payment arrears. There are also importers forced by cost pressure, it is likely to use a variety of loopholes to damage the interests of suppliers. Therefore, please ship the freight forwarder in Lebanon, do a good job in risk control, beware of the destination port buyers abandon the goods, non-payment and other risks.


Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business