Lebanese president snubs budget, delays new exchange rate

Lebanese president snubs budget, delays new exchange rate

BEIRUT: Lebanon is unable to put its new exchange rate into effect after its outgoing president declared the state budget unconstitutional and refused to sign off on it, officials said Thursday. The Finance Ministry in late September announced that Lebanon would change its pegged exchange rate to the dollar from 1,500 pounds to 15,000 starting Nov. 1, which they called a “necessary corrective action.” Parliament passed the cash-strapped country’s 2022 national budget in September, which included the amended rate. However, it took at least another week of bureaucracy before reaching President Michel Aoun’s office. Passing the 2022 state budget and unifying Lebanon’s several exchange rates are some of the prerequisite reforms needed to reach an International Monetary Fund-approved recovery plan to make the country viable again. The government has adopted several exchange rates for different services outside of the official rate, most recently for phone and Internet bills, while an opaque parallel — or black — market rate has been the dominant exchange rate, resulting in further chaos in the country’s economy. The Lebanese pound was pegged at just over 1,500 pounds to the dollar in 1997 to encourage investor confidence and to stall hyperinflation after its 15-year civil war.