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Lebanese Pound Hits Record Low of More than 24,000 per US Dollar

Lebanese pound banknotes on display at a money exchange shop in Beirut. (Reuters)
Lebanese pound banknotes on display at a money exchange shop in Beirut. (Reuters)
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Lebanese Pound Hits Record Low of More than 24,000 per US Dollar

Lebanese pound banknotes on display at a money exchange shop in Beirut. (Reuters)
Lebanese pound banknotes on display at a money exchange shop in Beirut. (Reuters)

Lebanon's currency slid to a new low against the US dollar on Thursday amid government paralysis as the country's financial meltdown deepens.

Several Beirut currency exchangers said the Lebanese pound was trading at around 24,200 per dollar, exceeding an all-time low of about 24,000 reached in July, Reuters reported.

The currency has now lost more than 93% of its value since summer 2019, when it began to split from the rate of 1,500 pounds per dollar at which it had been pegged since 1997.

Lebanon is in the throes of an economic meltdown that the World Bank has called one of the worst depressions of modern history.

The crisis is widely blamed on decades of corruption and mismanagement by political elites.

Lebanon formed a new government in September headed by veteran politician Najib Mikati with the aim of negotiating an International Monetary Fund program seen as key to unlocking international aid to stem the crisis.

However, it has not met in more than 40 days - an absence initiated by a push by Iran-backed Hezbollah and its allies to remove the judge investigating the August 2020 Beirut port explosion that killed more than 215 people and caused billions of dollars in damage.

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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.