BEIRUT —
Lebanon will weaken its official
exchange rate for the first time in more than two decades, a central bank
official said, as part of efforts to tackle a crippling financial crisis.
اضافة اعلان
The exchange rate has been officially pegged at
1,507 Lebanese pounds to the dollar since 1997, but will drop to 15,000 to the
greenback at the end of October, the official told AFP on condition of
anonymity.
With the Lebanese pound trading at beyond 38,000 to
the dollar on the black market — close to a record low — analysts are skeptical
that this step could stabilize a currency that has been in free-fall for three
years.
It has lost more than 95 percent of its value on the
black market since the 2019 onset of Lebanon’s financial crisis, branded by the
World Bank as one of the planet’s worst in modern times.
The decision to devalue the peg follows a visit last
week by a delegation from the
International Monetary Fund (IMF), which is
pressing Lebanon to implement reforms to unlock billions of dollars in loans.
The unification of the country’s several exchange
rates and the establishment of a credible and transparent monetary and exchange
rate system are among the IMF’s demands.
However, analysts noted that a devaluation to 15,000
to the dollar was still far short of that needed to create a unified exchange
rate.
“In effect, by declaring a new rate, we add to the
multiplicity of rates that already exist,” said economist Nasser Saidi.
Parliament this week approved an overdue 2022 draft
budget, a move also requested by the IMF.
One of the exchange rates listed in the budget
relies on the value of 15,000 Lebanese pounds to the dollar.
Lebanon is under IMF pressure to implement a raft of
reforms before President Michel Aoun’s term expires at the end of October,
economy minister Amin Salam told AFP.
With no consensus around a replacement for Aoun, who
was named in 2016 after a more than two-year vacuum, the process of selecting a
new of head state could face delays the country can ill afford.
Lebanon’s worst-ever economic crisis has seen
poverty rates climb to reach more than 80 percent of the population, according
to the UN.
Food prices, meanwhile, have increased by 2,000
percent since 2019, the World Food Program said.
Saidi, a former minister and vice governor of the central
bank, said the new exchange rate could compound financial woes. “For ordinary
people this means additional inflation (and) an increase in prices
accordingly,” he told AFP.
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