Currency devaluation: Syrian Lira, Israeli Shekel, and Lebanese Lira in focus

The ongoing internal turmoil in Syria and military developments in the region have significantly devalued the Syrian lira and the Israeli shekel.

In the black market, the exchange rate reached 14,000 Syrian lira per US dollar, while the dollar now equals over 4 shekels in Israel since the start of the Operation Al-Aqsa Flood.

However, in Lebanon, despite internal political tensions and the conflict in the south, the exchange rate for the US dollar has remained relatively stable at LBP 89,000.

What accounts for this stability?

On Monday, the acting Banque du Liban (BDL) Governor Wassim Mansouri swiftly took action when he received warnings of a potential surge in demand for lira payments. Contractors and suppliers were reportedly seeking payment in lira, intending to convert it into dollars, which would exert additional pressure on the exchange rate.

Mansouri immediately initiated the necessary contacts to address the situation. Government authorities, the Finance Ministry, and banks responded positively to his efforts.

Sources suggest the BDL reduced the cash mass from approximately LBP 62 trillion to LBP 58 trillion from October 7 to October 17. This action imposed additional constraints on speculators, ensuring that the US dollar exchange rate against the Lebanese lira remained relatively stable.

BDL sources emphasized that, at present, the central bank is capable of maintaining its monetary stability policies but does not signify an improved economic situation.

Projections indicate a decline of around 50% in economic activity, particularly in the tourism sector. This downturn may adversely affect employees' wages and benefits in this sector and other private industries.