Since 1992, the Lebanese pound has maintained its value against the dollar, due to the policy of fixing the exchange rate, until the economic crisis occurred in 2019, which led to the creation of a parallel market for dollar circulation. For the first time in 30 years, Lebanon modified, in February 2023, the official exchange rate for the dollar, by raising it from 1,500 pounds to 15,000 Lebanese pounds.
Many experts fear that 2023 will be an additional year of inflation and high prices in Lebanon, similar to last year, as the World Bank expected that the average inflation would reach 186 percent in 2022, which is among the highest rates in the world.
Finance Minister Youssef Khalil said that the broad economic theme for this year will be the unification of the dollar exchange rate, the implementation of basic structural reforms to enhance economic growth, and curb the deterioration of the local currency value
What will be the reason to decrease the exchange rate? After the exchange rate rose rapidly at the beginning of this year, we did not hear of any new circular from the Central Bank or any decision from the Ministry of Finance.
A large part of the expected government measures is one of the most prominent conditions of the International Monetary Fund, which is calling on Lebanon for economic and financial reforms in return for providing a debt loan of three billion dollars for a period of four years. How are these measures translated?
In the end, it became certain that the Bank of Lebanon’s measures in terms of controlling the collapse of the national currency, even if temporarily, are no longer useful, as the dollar is soaring due to many factors whose risks exceed the absence of monetary and financial policy.