For the past three years, the Lebanese pound (LBP) has been depreciating, surpassing 40,000 LBP to the dollar throughout November. The currency devaluation continues despite the maritime border with Israel and the rumors about Lebanon possibly become an oil producer.

LIMS explained that the maritime border deal created a positive climate that should have led to an appreciation of the LBP. However, the central bank stepped in, pumping 25 trillion LBP to purchase $418 million from the market. The increase of currency in circulation by 20% in less than a month explains the depreciation of the LBP. Then, after absorbing these dollars, the central bank reinjected parts of it in the market, which only resulted in a slight stabilization of the currency.

LIMS added that in the long run, the LBP will remain on a depreciating trend, given that the fiscal deficit and the banking crisis are both financed through increasing currency in circulation. Lebanon did not apply any monetary, fiscal, or banking reform since the beginning of the crisis in 2019 and resorted to shifting the burden of the crisis to the poorest via hyperinflation and currency devaluation. 
 
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