March 30, 2023

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The Lebanese pound devalued by almost 90%

Lebanon will adopt a new official exchange rate of 15,000 pounds to one US dollar from February instead of the current 1,507 LL, a nearly 90% devaluation, a central bank source said.

The Lebanese pound, pegged to the greenback since 1997 at a rate of 1,507 pounds to the dollar, has lost more than 95% of its value against the dollar in three years due to an unprecedented economic crisis that has rocked the country. “As of tomorrow, one dollar is worth 15,000 LL”.

“The ratio of 1.507 LL will no longer exist,” he added. However, the new official rate of 15,000 LL to the dollar is almost four times lower than the actual value of the pound on the parallel market, where the greenback is now trading at around 58,000 LL. According to the World Bank, Lebanon is experiencing one of the worst economic crises in the world since 1850, marked by a reverse rise in prices, a historic decline of the national currency, unprecedented poverty of the population and severe shortages.

Last year, the finance ministry had already announced the new exchange rate from November 1, 2022, but the move never materialised. The change in the official exchange rate comes as the International Monetary Fund (IMF) calls on the country to implement the necessary reforms to unlock much-needed aid.

Among these reforms are the exchange rate peg, the reform of the law on bank secrecy, the restructuring of the banking sector and the law on capital controls. The IMF has singled out Lebanon on several occasions for its delay in implementing reforms.

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