BDL governor Riad Salameh. (Credit: AFP)
BEIRUT — Banque du Liban's governor, Riad Salameh, confirmed on Tuesday an earlier decision that the Lebanese lira's official rate against the dollar will rise from LL1,507.5 to LL15,000 as of Wednesday, a devaluation of 90 percent of the national currency against the greenback. The change marks the first alteration in the lira's official exchange rate in 25 years.
The decision was announced last November and is, according to Salameh, is in line with reforms required by the International Monetary Fund in order for it to release $3 billion of financial aid over 4 years. However, the IMF has also made other reforms a precondition of the aid package and those are still not in place.
With the exchange rate change, the governor said that commercial banks "will see a decrease in their assets in lira once converted to dollars" at this new rate. As a result, they will have five years "to recover the losses caused by the devaluation" of the lira, he said.
The implementation of this new official rate coincides with its entry into force of circulars No. 151 and No. 158, replacing respectively the so-called "lollar" rates (the rates at which dollars lodged before late 2019 can be withdrawn from commercial bank accounts) of LL8,000 and LL12,000, as announced on Jan. 20. The LL15,000 rate has already been in effect for the "customs dollar" (the rate used to calculate lira customs duties on dollar-priced imports) since Dec. 1.