User:Wiki3636/Lebanese pound

Devaluation[edit]
Main article: Lebanese liquidity crisis

'''Lebanon recently lowered its official exchange rate for the first time in 25 years, reducing it by 90%. Despite this significant change, the local currency remains considerably undervalued compared toits market value. A popular saying, "There is no value," is commonly used to refer to the substantial price changes that have characterized daily life since late 2019.  Since September 2019, Ever since,''' the exchange rate had forked into multiple distinct rates due to Lebanon's banking sector collapse. Within six months, five distinct Lebanese pound rates were defined against the US dollar, officially and unofficially. They were valued at:


 * Official rate = 15,000 (February 2023). From December 1997 through January 2023, the exchange rate was fixed at LL 1,507.50 per US dollar. That official rate had been pegged for over 25 years, but Since Lebanon's financial crisis of 2019 it became effectively obsolete. The official rate was increased by a multiple of 9.95 on 1 February 2023 as per decision of the central bank to reach LL 15,000 per USD.
 * Lebanon's Central Bank's "Sayrafa" rate = LL 86,400 (May 2023). The Sayrafa rate is the rate the central bank redeems international credit and debit card payments.
 * "Lollar" (bank withdrawals of US$ in LL) = LL 15,000.[citation needed] Added citation in article
 * Parallel market rate = LL 100,000 (March 2023).

The parallel (or black) market rate is significantly higher than the official exchange rate.

Causes and Effects of the Economic Crisis
The Lebanese financial crisis drew widespread attention in October 2019, as numerous Lebanese citizens took over the streets and initiated the "Thawra" protest. Nevertheless, the economic predicament had been deteriorating for several years. The central bank implemented rigorous restrictions on withdrawals from foreign exchange accounts as they encountered significant difficulties in maintaining the value of the lira. This affected approximately 75% of all bank deposits. The major cause of the economic crisis was the implementation of the de facto capital controls, which greatly impacted the financial stability of the country.

The crisis had various effects on Lebanon and its people. They have encountered several challenges over the last few years, including the introduction of extra official rates for specific transactions, hyperinflation, a sharp decline in the gross domestic product (GDP), which resulted in shutdown of businesses and a higher rate of unemployment. Additionally, Lebanon faced the impact of the COVID-19 pandemic, which was then followed by the devastating beirut port explosion on August 4, 2020. It resulted in the loss of thousands of lives, injuries, and the destruction of the capital city, Beirut.

Transitioning to the U.S. dollar as the official currency is seen as an essential measure to address the ongoing severe crisis.