A dollar is worth 15.000 Lebanese pounds as of yesterday after the Central Bank of Beirut announced a 90 percent devaluation to bring the national currency closer to its real value on the black market.

The exchange rate of the Lebanese pound against the dollar was fixed at 25 for 1.507 years. But hardly anyone would exchange $100 for £105.700 at the official exchange rate, when on the black market they would get £5,9 million. Because of the huge difference in valuation, all trade in Lebanon has been conducted in parallel unofficial markets for years.

The value of the Lebanese pound began to sink sharply after a financial storm in 2019, said to be the result of decades of corruption, misappropriation of funds and mismanagement. The Central Bank's move is aimed at imposing an exchange rate acceptable to traders, as one of the first steps to get out of the crisis. It was also a condition of the International Monetary Fund for the approval of a rescue package in the amount of 3 billion dollars.

The new exchange rate could encourage Lebanese with foreign currency accounts to exchange foreign currencies for local pounds and use them in the market. But analysts indicate that this measure will not have a major impact on the large economy, which is dollarized.

The Lebanese pound lost 97 percent of its value between September 2019 and November 2022. Banks practically do not function, and the losses of the financial system are estimated at 72 billion dollars.

Citizens have not been able to withdraw foreign currency savings from their accounts for four years, which is why there have already been several "robberies of their own money" and hostage dramas. Everything is sold in cash only and dollars are preferred. Today, close to 75 percent of transactions in Lebanon are in dollars.

Cash registers are overflowing with banknotes, and vendors regularly carry firearms to protect themselves from robberies. The sale of steel safes increased by 15 percent last year.

Mobile money changers operate in offices and homes, offering 59.000 pounds to the dollar each. Large transactions are "keyed" by photographing the serial numbers on the dollars.
Such transactions open a huge loophole for money laundering and injecting dirty money into the system. A week ago, the US Department of the Treasury introduced sanctions against the Lebanese money changer Hassan Moukaled due to well-founded suspicions that he laundered money for the pro-Iranian militia Hezbollah.