Some 11 months after Lebanon’s stagnant economy entered full-on crisis, the country’s monetary and fiscal sectors are plunging into an abyss at record speed. The Lebanese pound has lost 80% of its value against the US Dollar, hitting a record LBP 7,000 to $1 as MEES went to press down from LBP 4,000 at the start of June (see chart).

The official government rate remains LBP 1,500 per the long-standing currency peg, but massive losses in the country’s central bank, Banque du Liban (BdL), have seen commercial banks enforce strict capital controls on dollar withdrawals – in essence locking depositors’ dollars in the banks leading to a thriving black market (MEES, 20 December 2019). (CONTINUED - 978 WORDS)