Lebanese pound hits record low of 100,000 to the dollar

The country's largest banknote is now worth only $1

US and Lebanese banknotes at a currency exchange in Beirut. The Lebanese currency sank to a new low against the US dollar on Tuesday. Getty

Lebanon’s currency has hit a record low to the dollar, with 100,000 pounds — the value of the country’s largest banknote — now worth only $1.

The new rate, which became a reality on Tuesday, had been expected in recent weeks as the value of the local currency continued to plummet almost unabated.

Before the country's economic crisis, 100,000 pounds was worth $67.

However, it will now take 10 million pounds — or 100 of the country's largest banknotes — to buy $100, throwing into question the need for smaller denominations such as the 1,000 and 5,000 notes.

Coins have largely become obsolete due to the currency crisis, with 500 and 250 pound coins turned into jewellery and other souvenirs.

Lebanon's currency has been losing value since 2019, when the first symptoms of the economic crisis began to show.

That crisis has since pushed more than 80 per cent of the population into poverty, according to the UN.

Over the past three years, residents have become accustomed to navigating the hardships caused by the economy’s rapid decline and the currency’s seemingly endless plunge.

The small Mediterranean nation is highly reliant on imports. However, most international agents will not accept pounds, forcing importers pay in dollars. This has driven up the cost of several goods and services.

Supermarkets and most shops display prices in dollars, and the majority of the economy has become dollarised — a stark disconnect with the nation’s citizens, most of whom are still paid in the free-falling local currency.

Lebanese salaries have not kept pace with the devaluation of the pound and rampant inflation, leading to the purchasing power of most people being severely reduced.