Lebanon will adopt a new official exchange rate of 15,000 Lebanese pounds to the US dollar.

The picture shows a currency exchange shop in Beirut, the capital of Lebanon.

(Reuters)

[Instant News/Comprehensive Report] The Central Bank of Lebanon announced that it will substantially adjust the exchange rate. The original exchange rate of 1 US dollar to 1507 Lebanese will be changed to 1 US dollar to 15,000 Lebanese pounds, depreciating by more than 90%.

According to a Reuters report, Riad Salameh, governor of the Central Bank of Lebanon, said that Lebanon will adopt a new official exchange rate of 15,000 Lebanese pounds to the US dollar on February 1, marking the official exchange rate that has remained unchanged for 25 years. The exchange rate has depreciated by about 97% in one go.

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Although the Lebanese pound has changed dramatically from the old exchange rate of 1507 to the current 15,000, it is still far from the unofficial currency market.

Through unofficial channels, 1 US dollar can be exchanged for 57,000 Lebanese pounds.

Salameh said the exchange rate adjustment would be applied to banks and is expected to lead to a sharp reduction in the stakes of institutions affected by the financial turmoil in the country in 2019.

Analysts expect the central bank's new policy to have relatively little economic impact because the Lebanese economy has already been dollarized and most transactions are based on unofficial currency exchange rates.

Salameh told reporters that "the assets of our banks will be reduced in terms of the Lebanese pound", and that in order to mitigate the impact, the banks will have five years to "recover the losses caused by the devaluation".

Salameh emphasized that adjusting the exchange rate to 15,000 is the first step towards the unification of multiple exchange rates in the future, including the official exchange rate, the central bank's "Sayrafa exchange rate platform" exchange rate (currently 38,000 Lebanese pounds to 1 US dollar), and unofficial market exchange rates .

The new policy is in line with the draft agreement Lebanon reached with the International Monetary Fund (IMF) last year and will unlock a rescue budget of up to US$3 billion (approximately NT$90 billion) in the draft.

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