LBP - Lebanese Pound

The history of the formation and development of the Lebanese Pound (LBP)

In 1924, the Lebanese pound was first issued, replacing the Syrian piastre, the official currency of Syria and Lebanon when they were still under the management of the French Bank after World War I.

After Lebanon separated from the Syrian mandate, the LBP was introduced, marking the country's monetary independence.

From 1950 to 1960, Lebanon was an important financial center in the Middle East, making the LBP a strong currency in the region.

In 1975, the Lebanese Civil War broke out, causing significant damage to the economy and diminishing the value of the Lebanese pound. The war caused inflation rates to rise, and the unstable political situation led to a severe depreciation of the Lebanese pound, especially against the USD.

In 1990, after the civil war ended, the Lebanese government restored the economy and stabilized the currency. With an exchange rate of 1 USD = 1,507.5 LBP maintained for nearly two decades, it instilled confidence in investors in this currency.

In 2019, Lebanon faced a severe economic crisis that caused the Lebanese pound to depreciate significantly.

In 2020, the value of the LBP depreciated by more than 80% compared to 2019, and the financial crisis in Lebanon continued to unfold.

Currently, the value of the Lebanese pound is still unstable and depends on many political and economic factors. The government and the Central Bank of Lebanon face many challenges in stabilizing the exchange rate and controlling inflation.

Lebanese Pound (LBP) Denominations

The Lebanese pound is issued in various denominations, including coins and banknotes. However, due to high inflation, coins are less frequently used compared to banknotes. In particular, high-denomination banknotes are more commonly used in daily transactions.

Lebanese Pound coins

The value of the Lebanese pound coins is small, so they are rarely used in daily transactions due to high inflation. The denominations of the coins include:

• 250 Piastre

• 500 Piastre

Lebanese Pound banknotes

Banknotes are the type of currency mainly traded in Lebanon, with common denominations including:

• 1000 LBP

• 5000 LBP

• 10000 LBP

• 20000 LBP

• 50000 LBP

• 100000 LBP

The banknotes of the Lebanese pound are designed with a variety of cultural, historical, and national symbols. The 50,000 LBP and 100,000 LBP banknotes are gradually becoming more common in daily transactions due to the severe depreciation of the currency's real value.

Lebanese Pound (LBP) exchange rate

The exchange rate of the Lebanese Pound against the USD is:

1 USD = 89,527 LBP

This high exchange rate reflects the weakening of the Lebanese pound compared to the US dollar. Recently, the value of the LBP has continuously declined sharply since the 2019 financial crisis.

Factors affecting the value of Lebanese Pound (LBP)

The Lebanese Pound is influenced by many factors such as economic, political, and social aspects, etc. Specifically as follows: 

Political crisis and social unrest

For many years, Lebanon has faced political instability, with the 2019 political crisis being a prime example. The political institution has weakened, with protests reducing investor confidence in the LBP.

Public debt and budget deficit

Lebanon has a very high level of public debt exceeding 170% of GDP. The prolonged budget deficit along with the enormous debt has caused investors to lose confidence in the country's repayment ability, leading to downward pressure on the LBP.Inflation and economic recession

Lebanon has experienced high inflation, leading to a sharp decline in the purchasing power of the local currency. In 2020, inflation reached triple digits and remained high, causing the LBP to rapidly lose value. 

Weak fiscal and monetary policies

The Central Bank of Lebanon has tried to control the LBP exchange rate by maintaining a fixed rate with the USD for many years. But the economic crisis has rendered this policy ineffective, and the LBP has rapidly depreciated on the black market.International factors

The tense situation in the Middle East and Lebanon's international trade relations with other countries also affect the exchange rate of the LBP. The weakening of foreign capital flows and remittances has reduced the supply of foreign currency, putting pressure on the exchange rate of the Lebanese pound.

Thus, the Lebanese pound (LBP) is affected by a series of complex factors, mainly related to the country's economic and political instability. Additionally, high public debt, rising inflation, and ineffective fiscal policies have led to the rapid depreciation of the LBP.

Future of Lebanese Pound (LBP)

The future of the Lebanese Pound (LBP) remains a subject of significant concern amid ongoing economic challenges and political instability in Lebanon. As inflation continues to erode purchasing power, coupled with a lack of effective monetary policy, the LBP faces substantial depreciation pressures. Efforts towards economic reform, including fiscal accountability and structural adjustments, are imperative to restore confidence in the currency. Additionally, international support and credible governance are essential to stabilize the LBP and foster a sustainable economic environment. The path forward necessitates a concerted approach to address the underlying issues affecting the currency's value.