A money changer counts notes at his shop in Beirut on Sep. 22, 2022. (Credit: ANWAR AMRO / AFP)
Banque du Liban will use an official exchange rate of LL15,000 to the dollar instead of the current rate of LL1,507, the Ministry of Finance said in a statement Wednesday.
The statement confirmed an announcement made earlier to Reuters by caretaker Finance Minister Youssef Khalil. The measure will come into effect on Nov. 1, the ministry said.
So far, the practical implications of this measure have not yet been clarified by the ministry.
In the statement issued in the late afternoon, the Ministry of Finance officially announced that BDL will "stop taking into account the rate of LL1,507 to the dollar."
This decision was made following the use of a LL15,000 exchange rate in the 2022 budget. According to the statement, the new rate "has become urgent to correct the impact of the abrupt collapse of the official exchange rate and the multitude" of rates in force. The Ministry also justified the change by stating "the financial and monetary recovery plan requires the unification of the exchange rate."
The LL15,000 rate is "a first step" for the "gradual" unification of rates, which was decided in agreement between the Ministry of Finance and the Banque du Liban, the statement added, noting the measure is based on Articles 75 and 83 of the Code of Money and Credit.
"The measure will be applied as of Nov. 1, 2022," the statement said.
Lebanese authorities introduced the LL1,507 rate in 1997, but the lira has lost more than 95 percent of its value since Lebanon fell into financial crisis three years ago. The parallel market rate stood at LL38,000 to the dollar, as of Wednesday evening.
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.