Between two coffees, the price of the dollar increased 9 percent
Shock exchange rate swings experienced throughout the day due to the currency crisis in Lebanon cause items in restaurants and cafes, which peg many items to the dollar, to rise throughout the day.
Finally, last Friday, a customer shared that he had two coffees at different prices, as the dollar rose 9 percent in one day against the Lebanese lira, it was one of the most talked about topics on social media.
While the Lebanese lira topped 50,000 against the dollar last week, another psychological threshold was crossed in the parallel market. The Lebanese pound, once pegged at 1,500 against the dollar, has lost 97 percent of its value since the start of the crisis, which plunged 80 percent of the population into poverty and plunged the country into economic disaster.
PARALLEL FACILITY, 33rd FLOOR OFFICIAL FACILITY
Although the current official rate is still 1,500, this rate is around 8,000 in banks. However, the ability of citizens to withdraw currency from banks is limited. On the black market and the parallel exchange rate, this figure exceeds 50 thousand. In 2022, the lira depreciates 93 percent against the dollar, while inflation in the country stands at 189 percent.
Although poverty has increased considerably in the country, restaurants are the examples where the currency crisis in Lebanon is seen most clearly. Since 2019, the Lebanese lira has increasingly disappeared from the menu, while businesses have switched to dollars instead of lira.
According to the story published in The National News by Nada Maucourant Atallah, customers pay in dollars or local currency in many restaurants.
However, those who want to pay in the local currency must pay at the parallel market rate, which is extremely volatile and can fluctuate within a few hours.
IN 3 HOURS THE TIME HAS ARRIVED
The customer, who had coffee at a coffee shop in Gemmayzeh, which is one of the most popular places to eat and drink in the capital Beirut, explained how the price of coffee increased in a matter of hours due to the dollar rate.
The sudden increase was caused by the restaurant’s menu price in dollars, while the sharp increase in the exchange rate during the day caused the products to increase during the day. Within three hours, the price of the customer’s coffee increased by 9 thousand Lebanese liras (3.40 TL).
In a tweet shared on social media on Friday, the customer said: “I ordered my first coffee at 10:30 and my second at 1:00. The Lebanese lira depreciated during this time and orders resulted in two different prices,” he wrote.
THE ECONOMY REALLY TRANSFERRED TO DOUBLE THE MONEY
Energy costs were also a major factor in the dollar price, as restaurants had to rely on expensive private generator providers as the city experienced extended power outages. But companies began to pay salaries not only in dollars, but in a combination of both currencies.
Restaurant owners aren’t the only ones taking steps to hedge currency risk. Many transactions can now be made in dollars, including appliances, clothing, health insurance, rent, and tuition. This is interpreted as a sign that the Lebanese economy is gradually dollarizing and switching to a dual currency.
Source: Sozcu
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
