Leaked Lebanese government reform plan addresses lira peg head on

ENAR

“The existing dual exchange rate is not suited for the long-term recovery of the Lebanese economy, because of its distortionary nature and the limited availability of FX-resources in the parallel market.”   The Lebanese Government’s reform program, April 6 draft Chained to the dollar for the longest time under a policy favoring partisan interests—but not Lebanon’s socio-economic best interests—the Lebanese lira has broken loose from its peg. The rate of LL1,500 to the dollar, an automatic beacon in the Lebanese economy for over 20 years, has been partially replaced by a parallel market rate that has been dancing and twirling all over the place, from LL1,800 to LL2,200 and back, and up again to within spitting distance of LL3,000 to the dollar. But it is not a happy sort of freedom. According to a new assessment that was produced as part of a nameless rescue plan for Lebanon—and leaked in draft