Official Source: Lebanon Draft Budget Applies Range of FX Rates

Official Source: Lebanon Draft Budget Applies Range of FX Rates

Lebanon's draft budget for 2022 applies exchange rates ranging between 15,000 and 20,000 Lebanese pounds per dollar for operating expenses, an official source told Reuters on Friday, moving away from the previously used official rate of 1,500.

The pound has lost more than 90% of its value since Lebanon slumped into financial crisis in 2019. The official exchange rate is still 1,500 to the dollar, while the currency is changing hands on a parallel market at around 23,000.

The government is due to begin discussing the draft budget on Monday at its first meeting in more than three months.

The source, who is familiar with the draft budget, said a specific exchange rate was not mentioned in the draft budget because a range of rates were applied.

Last year's budget, drawn up by a caretaker government and not passed by parliament, applied the official exchange rate of 1,500 - a peg that was introduced in 1997.

Unifying the multiple exchanges currently used in Lebanon is a policy recommendation of the International Monetary Fund, with which Beirut has said it hopes to sign a preliminary agreement between January and February.

Lebanon relies heavily on imports, including fuel for the state-run electricity company.

A copy of the draft budget