Lebanon devalued its official exchange rate for the first time in 25 years on Wednesday, weakening it by 90% but still leaving the local currency well below its market value.
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 has left the crisis to fester despite soaring poverty.
The central bank confirmed the new official rate of 15,000 pounds per dollar, scrapping the rate of 1,507.5 pounds at which the currency was pegged for decades before the collapse.
Market participants said the pound was changing hands at around 60,000 per dollar on Wednesday on the parallel market where most trades take place.
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 multiple exchange rates is one of several steps sought by the International Monetary Fund for Lebanon to clinch a $3 billion aid package that would help it to emerge from the meltdown.
But the IMF said last year progress in implementing reforms remained “very slow”, with the bulk yet to be carried out despite the gravity of a crisis marking Lebanon’s most destabilising phase since the 1975-90 civil war.
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