Lebanon adopted a new official exchange rate of 15,000 pounds per US dollar on Wednesday, the central bank said, marking a 90% devaluation from its previous official rate that had been unchanged for 25 years.
The shift from the old rate of 1,507 is still far off the parallel market where most trades take place. Two market participants said the pound was changing hands at around 59,000 per dollar on Tuesday.
The pound has crashed since a financial meltdown in 2019 after decades of corruption, profligate spending and mismanagement by the ruling elite in Lebanon, which is hoping to finalize a deal with the International Monetary Fund for a $3 billion bailout.
Lebanese officials have described the adoption of the new official exchange rate as a step towards unifying an array of rates that have emerged during the crisis.
Unifying the various rates is one of numerous steps sought by the IMF for Lebanon to clinch the aid package that would help it begin to emerge from the crisis.
But the IMF said last year progress in implementing reforms remained “very slow”, with the bulk yet to be carried out.
The new rate will apply to withdrawals in local currency from US dollar accounts from which depositors have for the most part been unable to withdraw hard currency since 2019.
Central bank governor Riad Salameh told Reuters on Tuesday the change would also lead to a decrease in the equity of banks.
Analysts expect the shift to have less impact on the wider economy, which is increasingly dollarized and where most trades take place according to the parallel market rate.