According to a report, the central bank is considering the elimination of the ‘lollar’

Lebanon’s Central Bank is considering phasing out the ‘lollar,’ a term introduced by Lebanese economist Dan Azzi in 2019. The ‘lollar’ refers to US dollars that were effectively frozen within Lebanon’s banking system following the country’s financial crisis in 2019. Media reports indicate that the Central Bank plans to do away with Circular 151, which currently values these trapped dollars at LBP 15,000.

Once abolished, the exchange rate for these dollars is expected to adjust to LBP 89,000, aligning with the black market rate and the dollar exchange rate proposed in the state budget for 2024, as reported by al-Joumhouria newspaper. This change is anticipated to occur following the approval of the 2024 budget, alongside the implementation of a capital control law.

According to sources from the Central Bank speaking to al-Joumhouria, if the 2024 budget faces delays in approval, the bank may consider an alternative approach. This would involve introducing a form of capital control through an internal circular. The aim of this measure would be to regulate exchange transactions and prevent the monetary base from becoming unmanageable.