Fear, turmoil in Lebanon as its financial crisis worsens
Shutting down, cutting salaries
It's a sign Lebanese fear their country's financial crisis, which has been worsening for months, could tip over into disaster.
Banks have clamped limits on withdrawals of U.S. dollars. The Central Bank's sources for dollars are waning. Politicians are paralyzed, struggling to form a new government in the face of tens of thousands of protesters in the streets for the past month in an unprecedented uprising demanding the entire leadership go.
Scared and concerned
A jewelry shop nearby has also seen a bump in business from people in need of cash coming in to sell their valuables, said its owner, who asked to be identified only by his first name, Nabil.
Highest debt ratios in the world
Lebanon has one of the highest debt ratios in the world, at around $86 billion or 150% of GDP. Much of the government's budget is sucked up by salaries in the sprawling public sector, while infrastructure has gone undeveloped for years. Struggling with the broken economy, the government began hiking taxes and taking other measures, prompting small protests early in the year.
One of Lebanon's biggest problems is that it has a dollarized economy. Since a crash in the Lebanese pound in the early 1990s, the currency has been pegged to the dollar. As a result, many things - from rents to cars to insurance premiums - are priced in dollars. Most Lebanese get their salaries in local currency, however.
What went down
The economy boomed for three years starting in 2008, with annual growth of about 8%. Then came a series of blows. First, the war in neighboring Syria sent more than 1 million refugees to Lebanon since 2011, straining the country's capacities.
Then the flow of hard currency into the country dropped starting in 2016, in large because falling oil prices reduced remittances from Lebanese in Arab Gulf nations. Salameh, the central bank's chief, responded with a program of so-called "financial engineering," encouraging local banks to get dollars from their branches abroad by paying high interest rates.