The Lebanese Lira, Explained
Money, as we know it, works as a medium of exchange, in part because its value is mutually agreed on in transactions. Lebanon is now reckoning with the economic consequences of when this is no longer true.
It has been a long time since Lebanese people knew the actual value of their money. There are, at least four vastly different exchange rates at which the Lebanese pound (LBP) is exchanged into U.S. dollars (USD).
The result is a daily struggle with misery, losses, and absurdity.
In order to explain the drop in the value of the Lebanese Lira, a dive into its history and important stages, based on the Central Bank's data, is important.
Lebanon's Currency Under The French Mandate
Ottoman domination of Lebanon, which lasted for more than four centuries, was brought to an end on October 6, 1918, with the entrance of the Levant Marine Division in Beirut.
Ottoman Empire | @Fanack
The used paper money by the Turkish Treasury, issued with a forced exchange rate, suffered the same fate.
In order for the Allied Forces to normalize economic life in Lebanon and cover their expenses, English authorities imposed the banknote of the National Bank of Egypt.
The Egyptian currency has been, since October 30, 1916, closely linked to the sterling and entirely covered by securities issued in sterling.
On September 1, 1920, the representative of France proclaimed Great Lebanon. The Bank of Syria was granted the concession of issuing the Syrian currency, which became legal tender on May 1, 1920.
Banknotes issued by this bank were reimbursable to the bearer or at sight by checks drawn on Paris, at the rate of FF 20 for 1 Syrian pound.
As a consequence, an independent currency-issuing department was established at the Bank of Syria. It was responsible for putting in circulation and withdrawing banknotes.
The Concession Of Issuing A Lebanese-Syrian Pound
via Wikipedia
On January 23, 1924, under the chairmanship of General Weygand, a convention was signed between the French, the Lebanese, and the Syrian governments. According to this convention:
The bank of Syria became the Bank of Syria and Great Lebanon , with a concession to issue the currency for a 15-year period, starting April 1, 1924.
The currency unit, the Syrian pound, became the Lebanese-Syrian pound, equivalent to FF 20.
Two series of banknotes of the same type were created, one in the name of Great Lebanon and the other in the name of Syria. However, the Bank was empowered to issue any of the banknotes on each territory, with free circulation in both countries.
The Convention Of May 29, 1937
Worthpoint
The Convention of January 23, 1924, was to expire on March 31, 1939. Meanwhile, the political status of the signatory states had changed.
On November 1936, a treaty of friendship and alliance was signed between France and Lebanon for a 25-year period.
As a result of successful negotiations between Lebanon and the Bank about the renewal of the concession to issue the currency for a 25-year period, the convention of May 29, 1937, was ratified on June 7, 1937.
Following are the most important points of this Convention:
The Lebanese currency is the only legal tender in Lebanon. The public authorities commit themselves to maintaining its parity against the French currency. The currency unit is the Lebanese pound, equivalent to 20 francs.
Starting January 1, 1940, the banknotes issued under the Convention of January 23, 1924, were to be replaced by special banknotes marked "LEBANON".
A New Monetary Era Starts - 1944
Franc Coins | LeftOver Currency
Pound Sterling Coins | Astelus