Tires burn during a demonstration in Beirut on June 11, 2020. - Mohammad Alaeddin / SIPA

The promise of the Lebanese authorities to inject dollars to try to stem the depreciation of the national currency did not reassure. The climate is even particularly tense, marked by the distrust of the population towards the government. New demonstrations took place on Friday evening in several cities against the wait-and-see attitude of the public authorities faced with the economic sinking of the country.

"Revolution, revolution"

In Tripoli, the big city in the north of Lebanon, the army thus dispersed on the main square hundreds of demonstrators who shouted "revolution, revolution". Protesters threw stones and Molotov cocktails at soldiers, and damaged facades of shops and banks. The soldiers retaliated with tear gas. In central Beirut, dozens of young people also set fire to shops. "We too in Dahiyeh are hungry (...) We are starting to no longer be able to buy bread," said Mehanna, 25, living in a Hezbollah stronghold in the south of the capital.

The gradual collapse of the Lebanese pound was accompanied by an explosion of inflation, not to mention business closings and mass layoffs, a crisis aggravated by the containment measures adopted for two months against the coronavirus. The economic stagnation, added to a shortage of currency dollars commonly used in Lebanon, was one of the catalysts of an unprecedented uprising, launched in October 2019 to denounce a political class almost unchanged for decades.

In response, during an "urgent meeting" of the government, President Michel Aoun announced the establishment of a mechanism to ensure "the injection of dollars into the market by the Bank of Lebanon". Speaker Nabih Berri spoke of measures to bring the exchange rate below 4,000 pounds for the dollar. Similar announcements were made by the authorities in late May but have had no effect. The Lebanese pound has been trading since Thursday at a historic rate of 5,000 pounds for a dollar, according to money changers, while the rate set by their union is supposed to not exceed 4,000 pounds. Friday evening, it was trading at less than 4,500 pounds.

Hezbollah on the move

"It is impossible for the dollar or any other currency to jump to this point in a few hours," said Michel Aoun, referring to a "plot". Officially, the Lebanese pound has been indexed since 1997 on the greenback at the fixed rate of 1,507 pounds per dollar.

In a Lebanon accustomed to the tensions between parties, observers wonder about the political game behind the scenes. The governor of the Central Bank, Riad Salamé, is engaged in a new showdown with the government and, according to experts, the powerful Shiite armed movement Hezbollah, which dominates politics, seeks to oust him. The governor of the Central Bank is criticized by the demonstrators for financial policies which favored an excessive indebtedness of the State, with the profit, they say, politicians and banks.

The current crisis is the most serious since the end of the civil war (1975-1990). Unemployment affects more than 35% of the working population and more than 45% of the population lives below the poverty line, according to the Ministry of Finance. The authorities are negotiating with the International Monetary Fund (IMF) to release financial aid, on which the country depends to start its economic recovery. But this aid is conditional on the adoption of reforms long ignored by the authorities.

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