BELIEF, أزمة الليرة, الملخص الاقتصادي, مجلس النقد والدولرة

Back to the Brink: Lebanon’s Reserves Erode Under Wartime Pressure

15:16 | 31 آذار 2026LIMS output
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Lebanon

The war is draining Lebanon’s foreign exchange reserves by roughly $340m a month, reversing a fragile recovery that had lifted reserves from about $8.7bn in 2023 to nearly $12bn by late 2025. That earlier improvement had been underpinned by tighter monetary policy, a halt in central bank financing of the state, and a fiscal surplus. However, since the outbreak of hostilities in March, the dynamics have shifted decisively.

LIMS explained that demand for dollars has increased amid rising uncertainty, while fiscal pressures have intensified as emergency spending rises and revenues weaken. At the same time, the external position has deteriorated: higher import costs for fuel, food and shipping are coinciding with a sharp fall in tourism inflows.
 
LIMS argues that the apparent stability of the Lebanese pound is misleading. The exchange rate is being sustained largely through intervention by the Banque du Liban, at the cost of further reserve depletion. In effect, Lebanon has reverted to a de facto peg at a much weaker level, echoing pre-2019 dynamics without addressing the structural flaws that led to the financial collapse. While this arrangement held in calmer conditions, the war is increasingly testing its durability.
 
Against this backdrop, LIMS calls for the establishment of a currency board to anchor monetary stability. By fully backing the monetary base with foreign reserves and removing discretionary monetary policy, a currency board would help restore confidence in the Lebanese pound and shield the system from instability and wartime shocks. Without a currency board, the current exchange rate is unlikely to prove sustainable under prolonged conflict.

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