What Is the Lebanese Pound (LBP)?
LBP is the currency code for the Lebanese pound, the currency of Lebanon. It replaced the former currency, the Syrian pound, in the late 1930s.
The currency is officially pegged to the U.S. dollar (USD) at a rate of one dollar to 1,507.5 USD. However, since 2020, due to a prolonged economic and political crisis compounded by the COVID19 pandemic, the official exchange rate is not used for practical purposes as the government has imposed strict capital controls like cash withdrawal and foreign exchange limits. As a result, the LBP is probably greatly devalued compared to the official peg.
- LBP is the currency code for the Lebanese pound, the national currency of Lebanon.
- The currency experienced extensive depreciation during the civil war of 1975 to 1990.
- The currency is officially pegged at a rate of 1507.5 pounds per USD; however, recent political and economic instability in the country has greatly devalued the LBP in practice.
Understanding the Lebanese Pound
The LBP originally was divided into 100 qirsh, or piastres. Due to inflation, these smaller units are no longer needed, and local prices are simply in pounds. The currency is pegged at a rate of 1507.5 pounds per U.S. dollar (but see above). The published rate fluctuates marginally around this figure.
The banknotes, or paper currency, are printed by Lebanon's bank, the Banque du Liban, going back to 1939. The notes were printed in denominations of one, five, 10, 25, 50, 100, and 200 pounds. Over the years, the banknotes in circulation have grown to include 1,000, 5,000, 10,000, 20,000, 50,000 and 100,000 pound bills. The coins include 50-, 100-, and 500-pound denominations. The LBP symbol is .ل.ل.
Lebanon has had a long list of national currencies, beginning with the Ottoman lira, followed by the Egyptian pound, the French franc, and the Syrian pound, before fully converting to the LBP in 1939.
A Brief History of Lebanon and Its Currency
Lebanon, also known as the Lebanese Republic, is a country located along the coast of the Mediterranean Sea on the continent of Asia. The country is bordered by Israel and Syria. It is believed to be the location of some of the oldest human settlements known to man, with civilization dating back more than 7,000 years.
Lebanon, as it is today, did not exist until the 1920s, when France established the Greater Lebanon state. The state later became a republic in 1926 and gained total independence in 1943. The country experienced a time of great prosperity prior to the beginning of turmoil in the region. This turmoil ultimately led to a civil war in 1975. The war lasted until 1990.
Around the middle of the 1980s, the value of the pound began to drop. Combined with the impacts of warfare on the country's infrastructure, the economy drastically declined. Once the war ended in 1990, Lebanon once more began to experience a period of economic growth and stability. However, at the beginning of the 21st century, approximately one-third of the residents of Lebanon continued to live below the poverty line.
During the war, the LBP depreciated from 0.33 USD to approximately 0.0004 USD. In 1997, the LBP was fixed at a rate of USD/LBP 1507.5, or 0.0066 USD.
Beirut is the capital of the country, which is ruled by a unitary multiparty republic with a single legislative house, a president, and a prime minister. The official language of the region is Arabic, but Armenian, Kurdish, French, and English are also spoken in the region. Syriac is also sometimes used in religious services.
The country's major exports include gold, other metals, and fruit. Between 2015 and 2018, gross domestic product (GDP) growth slowed to below 2%, with 0.2% GDP growth in 2018. Inflation has both high and low years. Between 2015 and 2018, it ranged between 0.9% (2016) and 5.9% (2018).
Assume that the USD/LBP rate is 1,511, which means it costs 1,511 LBP to buy one USD. The USD/LBP exchange rate typically hovers in close proximity to the 1507.5 peg.
To see how many USD an LBP can buy, divide one by the USD/LBP rate. This results in an LBP/USD rate (notice the codes are flipped) of 0.00066. One LBP buys a small fraction of a U.S penny.
The Lebanese pound is pegged to the USD, but not other currencies. Therefore, the LBP will fluctuate to a greater extent against other currencies.
For example, if the EUR/LBP rate is 1,659, that means it costs 1,659 LBP to buy one euro. If the rate were to drop to 1,400, the LBP increased in value relative to the euro, since it now costs fewer pounds to buy one EUR. On the flip side, if the rate increased to 1800, then the LBP lost value to the EUR since it now costs more pounds to buy a euro.