The pound started tanking in value against the US dollar as remittances from abroad slowed dramatically, setting in motion a domino effect. The fixed official exchange rate of 1,500 Lebanese pounds to $1 had endured for 23 years, rewarding the people of Lebanon with stable purchasing power and a relatively higher standard of living for the region.īut eye-watering sovereign debt levels, corruption, economic mismanagement and a decade of deeply stunted growth fed by the war next door in Syria finally caught up with the Lebanese currency last summer. Just six short months ago, US dollars and Lebanese pounds had been used interchangeably. The deal, which took place outside a shuttered shop, was negotiated through a car window, and involved swapping currencies inside a rolled-up newspaper. The risk is not lost on some people who engage in these illicit transactions, but who consider themselves as otherwise law-abiding.Ĭarl, a finance graduate in his late 20s who asked Al Jazeera to withhold his surname, chuckled as he recounted his last illegal exchange transaction. Those who are found guilty of violating Lebanon’s exchange laws could face up to three years in prison and a maximum fine of 10 times the yearly minimum wage- that is 81 million pounds or $20,250 at the current black market rate. “People who do this are opening themselves up to prosecution.” Exchange activities can only be conducted by licenced offices,” a senior figure in Lebanon’s Internal Security Forces told Al Jazeera, speaking on condition of anonymity without authorisation to discuss the matter. Even small peer-to-peer exchanges of a few hundred US dollars are strictly forbidden. Some messaging app groups connecting black market buyers and sellers of currencies in Lebanon have swelled since late April to boast hundreds of members, after a government crackdown on legal, parallel exchanges backfired and drove the trade deeper underground No grey area Due to a government crackdown on legal, parallel exchanges, the black market is the only way most people in the country can currently swap rapidly devaluing Lebanese pounds for increasingly scarce US dollars. Some of those groups have swelled since late April to boast hundreds of members. Though illicit, such transactions have become commonplace in the crisis-torn nation, arranged between people who meet through popular messaging apps like WhatsApp and Telegram. This transaction, which Al Jazeera observed recently, is a black-market currency exchange. “Let me know when you have more,” he says, and disappears up the street. He drops the passenger off where he was picked up.
#What is the black market driver
By the time he’s finished, the driver has circled the block. Inside are dozens of crisp blue and green Lebanese pound notes, 50,000 and 100,000 denominations, each bearing the name of Lebanon’s central bank.
The numbers confirmed, the driver reaches into a door compartment, pulls out a bulging envelope and hands it to the passenger, who opens it. The customer pulls out a small roll of United States $100 bills, counts them individually and hands them to the driver, who counts them again. Pleasantries exchanged, the two get down to business. “How’s it going? Thanks for doing this on short notice,” says the customer to the driver.
Beirut, Lebanon – A four-wheel drive vehicle pulls up to the curb of a narrow side street in Beirut and collects a customer who climbs into the front passenger seat.
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