Lebanese Supermarkets Turn to US Dollars as Local Currency Plummets Amid Ongoing Economic Crisis

Lebanese supermarkets have started pricing items in US dollars instead of the local currency, which has suffered a dramatic decline due to the country's ongoing economic crisis.

The move comes after the government announced it would allow the practice in a country heavily reliant on imports. Lebanon has been in the midst of a crippling economic crisis since late 2019, which has led to poverty rates climbing to over 80% of the population, according to the United Nations. The local currency, officially pegged at 15,000 to the US dollar, was trading at almost 90,000 to the dollar in March 2023, compared to 60,000 in late January.

The decision by supermarkets to price items in dollars is likely to make it easier for them to keep up with the rapidly fluctuating exchange rate, which has seen prices for basic goods such as food and medicine skyrocket in recent months. The move is also expected to provide some degree of price stability for consumers, who have been hit hard by the economic crisis.

While some consumers have welcomed the move, others are concerned about the impact it could have on the wider economy. Susane Zeitoun, 28, who was shopping at a supermarket in Beirut, said: "Every week, or every day even, products are becoming more and more expensive. Now I have to calculate prices into Lebanese pounds." Meanwhile, Sarah Rida, 37, said that "pricing items in US dollars is better" as it would provide more price stability.

The Lebanese government has been struggling to deal with the economic crisis, which has been compounded by political instability and a lack of leadership. The country is currently being run by a caretaker government and is without a president, as lawmakers have repeatedly failed to elect a successor to Michel Aoun, whose mandate expired at the end of October. In February, Economy Minister Amin Salaam announced that supermarkets would be able to start pricing items in dollars, while customers could pay in dollars or Lebanese pounds at the volatile market rate. Each store would have to clearly announce the exchange rate it was using each day.

The economic crisis in Lebanon has led to widespread poverty, high unemployment rates, and a shortage of essential goods such as medicine and fuel. The World Bank has said that food price inflation in the country reached 332% year on year in June 2022, the worst in the world. The crisis has also led to a mass exodus of Lebanese citizens, with many seeking refuge in other countries. The situation in Lebanon remains extremely challenging, with no clear solution in sight.