This country is switching to US Dollar

this paper napkin is now worth more than this  paper money in fact just one napkin from this   pack is going to cost you 2 000 Lira one  thousand lira in Lebanon now equals just   one cent this one it's worthless its currency has  lost 98 of its value the past few years and 100   000 is the largest banknote it was equal to  66 USD two years ago but today it's about one   dollar prices in Lira have become insane a cup of  coffee at Starbucks went from 5 000 Lira to 380   000 Lira a short Uber ride costs 500 000 a Big Mac  at McDonald's more than one million the earlier is   going down but now most people are using dollars  in trading in retail now its people are shifting   to a different currency so almost everything  you're seeing is written in US dollar now you just   have your prices and dollars in it so much easier  this is not really happening by choice but out of   a crisis we have to adapt to it so there's no way  of doing in a different way business owners have   given up changing their prices every day or even  every hour the dollar rate has been fluctuating   a lot so we decided to stick to Dollars the rent  everything got paid dollars but not everyone is   happy about this move toward dollar we want later  we don't want dollar it's really bad like I don't   think everyone understands the people don't accept  to pay in dollars every country should have its   own economy its own currency a dollarization of a  country will impact everyone and everything a lot   of my friends they had to go to other universities  because they couldn't afford it anymore especially   that the kids are in dollars now we lost a lot  of professors so is lebanon's official currency   going extinct this day will come eventually but  what happens when a country starts giving up on   its own currency for another one well America's  Dollar Save Lebanon from its economic collapse   it's actually very sad to see all your friends  leaving in all your family leaving you end up   alone in Lebanon my dream in life you can say an  existential crisis dollarization when a country   uses the US dollar in addition or instead of its  own currency so right now I just exchanged 100   US dollars and this is what I got I mean  this is almost 10 million Lira 10 million   imagine as dollarization happens when people  stop trusting their own currency to be exact   this is 9.4 million all of this for 100 imagine  trying to buy a car pay your rent or even buying   a Big Mac just a couple of years ago this would  be ten thousand Lira today this will cost you one million 50 000 Lira you will not see a menu  written in Lira anymore because it fluctuates too   much it's harmful for business owners to keep  their menu in Lebanese liras every minute the   dollar change imagine you're selling Nutella  you're importing it so you're paying a fixed   price in US dollar but your local currency goes  from being worth 1500 Lira per one US dollar to 10   000 Lira then twenty thousand then seventy  thousand at one point reaching 140 000. you   should ask everyone on which rate are you using  now it's 95 maybe after one minute will be 100.   every hour we might change the price you can  easily see how you can actually stand to lose   money simply because you want to sell something  now that everything is authorized already like   people are barely depending on the Lebanese era  even just six months ago every single item in   this store was in Lira and now there's still some  stuff in Lira but more and more almost everything   you're seeing is written in US dollar many  customers prefer this just because it's easier   one Starbucks coffee is 370 000 Lira and remember  this is the biggest banknote so imagine all the   bills you need to get out just to buy a coffee  now it's a little bit more stable because we   entered the dollarization process business owners  are less stressed you don't get to worried if the   daughter went up or down if you're losing or  not now you just have your prices and dollars   and it's so much easier but the US dollar already  impacts everything around the world not just Goods   but Services too look at a company like this  they're doing maintenance on air conditionings   the services are priced in dollar now if they  were to have priced it in Lira and the lira   is fluctuating every day every hour they could  actually really be in trouble an app like uber   has gotten so confused about the currency that  you can actually bid on the price of your Uber   so here you have it it's suggesting about six  dollars or so but I can bid below that at 470   000 Lira up to eight hundred thirty thousand so  what happened is that whatever the price that   was quoted in the app the driver wouldn't want to  accept that you he would get a request and then   make a phone call and you would actually negotiate  it over the phone but now Uber lets you negotiate   it through the app switching from a currency  that's undergoing hyperinflation gives promise   for a bit of stability especially at a time where  the banks here have collapsed people can still pay   Lira but at least the US dollar isn't constantly  fluctuating like crazy their price and dollars   it's easier for both of us the customer can either  choose to pay in dollars or in Lebanese but at the   daily rate but what are the pros and cons of  dollarizing considering creative and La button   and like I'm totally against it with every problem  happens between us and the United States they can   just turn off the flow of money the same as like  we can't use Turkish liras we can't use yours we   shouldn't be able to use dollars but imagine  suddenly you need to pay for your groceries   and rent in dollar but you're getting a salary in  Lira it's harming the people their salaries are   still in the Lebanese Lira now imagine many will  convert their monthly salary from Lira to dollar   but it will only equal just two hundred dollars  per month so you're making one dollar an hour so   how many hours do you need to work to get some  basic items Pepsi one hour mayonnaise two hours   local hazelnut spread three hours Nutella six  hours washing detergent seven hours McDonald's   Big Mac meal one day of work a clothing iron three  days Nike shoes three weeks a refrigerator one   month of salary a used car three years of salary  this is a reality for many especially government   workers who obviously won't be paid in dollars  so many here will turn to family abroad who send   money back to Lebanon it's called remittance and  Lebanon has become the world's most remittance   dependent country it's said it accounts for more  than a half of its total GDP they got their money   from outside and the US Dollars which is good  for the government in Lebanon and more and more   salaries are becoming dollarized employers might  start by paying you 50 Lira fifty percent dollar   it's very hard to find anyone who's going to  accept to work if it's all donorized the wages   are still haven't increased the salaries are  really low two years ago if you were lucky you   had family abroad sending you dollars dollars  got you relatively far you exchanged to Lira   and you could live well off Lebanon was cheap for  anyone with dollars I visited here and would take   a 10 minute Uber ride for two dollars or eat  a great lunch for three dollars but Lebanon is   no longer like that and it's partially because  of the dollarization they're more expensive now   in dollars than they used to be before everything  is getting more expensive in dollars let me start   in Dubai in showing you the price of a chicken  platter from a restaurant chain called Roadster   this has locations throughout Lebanon and Dubai  in Dubai it costs 13.50 now let me show you in   Beirut the price is 12.50 prices are becoming  more expensive even even in dollar than before   the crisis started in 2019 so I've heard that  this restaurant actually gives you a really   good exchange rate so I have the option between  paying in local currency or in US dollar I'm gonna   pay in US dollar and then I will get my change in  Lira but at a really good rate so now essentially   every restaurant every coffee shop has become a  currency exchanger but how did Lebanon get into   this financial crisis around Beirut right  now you will see Billboards and ads to buy   property in Greece buy a passport to another  country or to buy gold everybody's investing   in gold right now because the gold is getting  high today Lebanon has no president there are   warrant arrests for its Central Bank Governor  its people have lost faith all faith in their   government it's been really hard for everyone  I just want to curse these people I've seen   my brothers lost all their money in their bank  accounts their life savings I've seen my aunt   who worked so hard as a public sector and they've  lost everything the banks here collapsed in 2019   after massive corruption and after the banks  put restrictions on withdrawals and transfers   since then Millions have not been able to get  their money that was in their Bank some people I   interviewed tell me that any disposable income is  just used up immediately what are they gonna save   up their money for they had saved money before  and then realized what happened so they might as   well enjoy I think the time that they have and the  money that they have instead of being depressed so   why is Lebanon dollarizing over other currencies  well for one it is the default Global Currency the   vast majority of global transactions take place in  dollar and number two Lebanon has actually always   been somewhat dollarized even before the crisis  Lebanese people used to use the dollar I remember   coming to Lebanon in 2015 and that was the first  time I had ever seen an ATM that dispensed US   dollar lebanon's most recent hyperinflation  comes after Decades of well inflation let's go   back a few decades back then 500 lira it could be  somebody's monthly salary today cup of coffee 400   000 Lira but never until now has the country  switched its default currency to the dollar   more than a dozen countries use dollar as their  official currency and more than 66 countries paid   their currency to the dollar meaning their values  will basically be equal regardless of fluctuations   while the dollar dominates the global economy  its importance could be under threat with some   calling for the D dollarization but hold on  if countries only switch to Dollar when their   currency is failing them can the Lebanese Lira be  saved and should it even be saved Dr Lyal Mansour   is an economics professor at Lebanese American  University solarization is an illness she tells   me that the only way forward is for Lebanon to  give up completely on the Lira and eventually   introduce a brand new currency I suggested  a low proposal that parliament in Lebanon in   2020. she says that by having its own currency  Lebanon will keep its sovereignty but by pegging   it to the US dollar this will ensure stability  you create a new currency but this currency is   n't by US dollar dollar 470 we'll call it Ebony's  dollar you can call it bless dollar you can call   it Middle East dollar so aside from a full  dollarization Lebanon could in theory ditch   the Lira completely but introduce a new currency  one day but there are also more Alternatives here   too we don't think that dollarization is the  Silver Bullet it's the best option for now and   it's one that people trust and people understand  I meet the founders of Sinbad they've created a   platform for a stable coin in digital dollars  we're building a stablecoin wallet that helps   people protect themselves from hyperinflation  there are more Lebanese outside of Lebanon than   inside there needs to be a payment Network that  reflects the global Network that is Lebanon and   we think the best option for this is blockchain  using his platform people can send money for free   all within their digital wallet Sinbad basically  focused a lot on the user experience so that we   can make it as simple as just creating an account  on Tick Tock but changing an entire country's   Financial system takes time and for now USD dollar  is the easiest way to go so will its change toward   dollar end lebanon's crisis our family spread  all over the world some of them are in Australia   Egypt we really hope to stay in Lebanon my plan  unfortunately leaving unfortunately I would love   to stay here over it it's not a good place  anymore do you think the government will fix   the currency no I don't think our government  is very bad one night while in Beirut I meet   a bar manager who tells me he just moved  back to Lebanon after he moved to Lagos   just a few years ago because of the crisis  it's getting paid higher there but I said   no because this is where I grew up and there  are others who tell me they will never give   up on this country why are you still here  what are you doing here look at the country goodbye like your like your family and  discomforting no matter what happens   LeBron is still just so Lively but I ask  many of the people I meet what do you hope   happens we all hope that Lira will become  stronger again but now we're in the middle   of the crisis I hope that the people will make  moves like two years ago and take down all the   corrupted people in the government I honestly  had hope I really want to see that there's   but like I'm not sure if there's there is any hope

Channel: Uptin

Views: 480,575

Keywords: uptin, uptin saiidi, uptin cnbc, cnbc international, cnbc, wsj, bloomberg, business insider, cheddar, is us dollar under threat, is us dollar going to crash, is us dollar crashing, us dollar collapse, us dollar collapse 2023, us dollar rate today, is the dollar doomed, is the dollar dying, us dollar is dead, why is lebanon so expensive, why is lebanon in crisis, brics currency news, brazil argentina currency, oil trade in yuan, what will replace the dollar, is america losing

Id: S5LDwRSuFDQ

Length: 13min 22sec (802 seconds)

Published: Sat Jun 03 2023