Lebanon to slash official exchange rate from end of October

Lebanon to slash official exchange rate from end of October
Lebanon will reduce its official exchange rate from the end of October as its pound continues to slump
2 min read
28 September, 2022
Lebanese authorities introduced the 1,507 rate in 1997 [Getty]

 

Lebanon plans to slash its official exchange rate from the end of October, replacing the 1,507 per dollar rate adopted 25 years ago with a rate of 15,000 in a step towards unifying numerous exchange rates, the finance minister told Reuters.

The pound has slumped by more than 95% from the official rate since Lebanon fell into financial crisis three years ago, with dollars currently changing hands at around 38,000 on a parallel market.

Finance Minister Youssef Khalil said doing away with the 1,507 rate was a "good start".

"This is the position the state has taken today," he said.

He said the government would be explaining the move to the public over the next month, after which the 1,507 rate would be abolished.

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It marks a milestone in the meltdown that has swept Lebanon since 2019, plunging swathes of the population into poverty in the worst crisis since the 1975-90 civil war.

Lebanese authorities introduced the 1,507 rate in 1997.

Unifying the numerous exchange rates is one of several conditions set by the IMF for Lebanon to secure a badly needed aid package. Last week, the IMF said Lebanon's progress in implementing reforms remained very slow.

On Monday, the parliament approved a state budget that applied the 15,000 rate to customs taxes, which Khalil said paved the way for the decision announced on Wednesday.

(Reuters)