USD vs. LBP
From LBP 2.3 to LBP 15,000 and where to?
In the throes of the political, economic, financial and banking crisis confronting Lebanon since end of 2019, the U.S. dollar (and other foreign currencies) has soared to unprecedented levels against Lebanese pound, reaching about LBP 15,000 in mid-March 2021. This led the elderly to hark back to the past, making us resort to books and researches on the evolution of the dollar exchange rate against Lebanese pound during the past years and decades.
USD/LBP: Eight Stages
By reviewing the evolution of the dollar exchange rate against Lebanese pound in the past 60 years, we conclude that it has passed through eight stages:
- First Stage (1960-1981): Strength of Pound and Stability of Exchange Rate
The period from 1960 to 1981 was marked by the strength and stability of the Lebanese pound exchange rate against the U.S. dollar.
-1960 --> LBP 3.08 /USD
-1964 --> LBP 3.08 / USD
-1965 --> LBP 3.06 /USD
-1975 --> LBP 2.30 /USD
-1981 LBP 4.30 /USD
- Second Stage (1982-1985): Beginning of Increase
This period saw the beginning of increase in the dollar exchange rate against Lebanese pound.
-1982 --> LBP 4.70 /USD
-1983 --> LBP 4.52 / USD
-1984 --> LBP 6.51 /USD
-1985 --> LBP 18.1 /USD
- Third Stage (1986-1992): The Substantial Increase
This period was marked by a substantial increase in the dollar exchange rate against Lebanese pound. As shown in Table No. 1 below, it had increased from LBP 87 at the end of 1986 to LBP 2,825-3,000 in September 1992.
Table No. 1: Evolution of dollar exchange rate during 1986-1992.
Source: Banque du Liban (BDL).
- Fourth Stage (11993-1998): The Decline
This stage was marked by a decline in the dollar exchange rate. As shown in Table No. 2 below, it had decreased from LBP 2,825 to LBP 1,508.
Table No. 2: Evolution of dollar exchange rate during 1993-1998.
Source: Banque du Liban (BDL).
- Fifth Stage (1999-October 2019): The Stability
During this long period, the dollar exchange rate had stabilized at LBP 1,505-1,515, with an average of LBP 1,507.5.
- Sixth Stage (October 2019-December 2019): Beginning of Increase
The dollar exchange rate rose to LBP 2,000.
- Seventh Stage (January 2020-January 2021): The Substantial Increase
During this period, the dollar exchange rate had increased from LBP 2,000 to LBP 8,500 as follows:
-January 2020 --> LBP 2,000-2,400/USD
-February 2020 --> LBP 2,200-2,500/USD
-March 2020 --> LBP 2,400-2,650/USD
-April 2020 --> LBP 2,800-3,800/USD
-May 2020 --> LBP 3,500-4,250/USD
-June 2020 --> LBP 5,500-7,200/USD
-July 2020 --> LBP 7,500-8,000/USD
-August 2020 --> LBP 8,000/USD
-September 2020 --> LBP 7,500-8,200/USD
-October 2020 --> LBP 6,500-8,500/USD
-November 2020 --> LBP 7,250-8,000/USD
-December 2020 --> LBP 7,200-8,000/USD
- Eighth Stage (January-March 2021): The Dramatic Collapse
The dollar exchange rate kept rising to nearly LBP 15,000 in the first months of 2021, causing the dramatic collapse of Lebanese pound.
-January 2021 --> LBP 8,500-9,000/USD
-February 2021 --> LBP 9,000-9,500/USD
-March 2021 --> LBP 9,500-15,000/USD
The Lebanese are anxiously wondering about the future of exchange rate. Will the dollar’s value return to LBP 1,500/ 5,000 or will it reach LBP 20,000/50,000 or more as some people expect?!!!
These are questions that remain unanswered- not economically, but politically.