Will “dollarization” help or hurt Lebanon?

By March 13, 2023

Lebanon (MNN) — Lebanon turns to United States currency in the latest attempt to save its failed economy. Business owners say they’ll only accept U.S. dollars (USD) because the Lebanese pound or lira is practically worthless.

“The (Lebanese) currency depreciates two or three times a day, which means you don’t have a stable [value],” Heart for Lebanon’s Camille Melki says.

“[Business owners] want to ensure that what they get paid in the mornings keeps its value the next day, rather than depreciate so sharply. A lot of supermarkets, hotels, [and] restaurants started to price their goods and services in USD; meaning [it] doesn’t matter what the value [is] in Lebanese.”

Lebanese currency has lost 98 percent of its value since 2019. “In 2019, if you want to fill up your car with gas, [it cost] 90,000 [Lebanese pound]. Now, you will pay 10 million [Lebanese pound] to fill up your car,” Melki says.

“[As a result,] you’re carrying a paper bag full of worthless Lebanese currency. This is why they’re (business owners) asking for foreign currency, predominantly USD.”

While “dollarization” aims to stabilize the economy, it also threatens to deepen the crisis.

Three-quarters of Lebanon’s six million people live in poverty, and few have access to dollars.

Aid distribution
(Photo courtesy of Heart for Lebanon)

“Most citizens in Lebanon still make their salary in Lebanese pounds” and cannot convert their earnings to dollars because the banking system has collapsed, Melki explains.

“So, where [will locals] get the U.S. banknote? And how can you afford such a sharp price increase (inflation)?”

Help meet physical and spiritual needs through Heart for Lebanon here. “We give unconditionally, but we also give with the joy to share the Gospel,” Melki says.

“When asked and prompted, we want to tell people that we come in the name of our Lord and Savior, Jesus Christ.”




Header and story images courtesy of Heart for Lebanon.

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