New banknotes as part of currency reform: Lebanon to introduce LBP 500,000 and LBP 1 million bills

Report by Lea Fayad, English adaptation by Yasmine Jaroudi 

Lebanon is preparing to release higher denominations of its national currency, including LBP 500,000 and LBP one million, to address some of the practical challenges caused by the collapse of the lira. The move comes following Parliament's approval of a law during its latest session.

So far, no decision has been made regarding the total amount of new currency to be printed or the final design of the new banknotes. 

According to sources at the Banque du Liban (BDL), the printing process will begin once the law is signed by the president and published in the Official Gazette. The production and introduction of the new bills are expected to take about a year.

The introduction of larger denominations has raised concerns about the possibility of injecting more lira into the market, which could further erode its value. 

However, officials emphasized that the new notes will be issued gradually, and the currency supply will be carefully managed to maintain the current liquidity level, estimated at around LBP 82 trillion. Smaller denominations will continue to circulate alongside the new notes.

Questions have also emerged about why authorities are not opting for a currency redenomination—for instance, removing zeros so that a 100,000-lira bill would become a 100-lira note, roughly equivalent to $1.1. Banking sources explained that redenomination would be significantly more expensive, requiring the complete reprinting of all denominations.

The idea of printing larger bills had been discussed previously but is being implemented now because conditions are seen as more favorable. 

The lira's exchange rate has remained relatively stable for nearly two years, while early signs of political stability and the start of financial reforms are offering a cautious sense of hope. These reforms are seen as crucial to restoring confidence in the national currency and the banking sector.

Still, Lebanon remains far behind global financial trends, where many countries have moved toward smart and digital currencies.