Lira redenomination: Could Lebanon's currency be reshaped by dropping zeros?

Report by Lea Fayad, English adaptation by Yasmine Jaroudi 

What if one U.S. dollar equaled LBP 9 instead of 90,000? 

The idea of removing zeros from Lebanon's currency has resurfaced as the country struggles with its prolonged financial collapse.

The concept of redenomination is not new. Several crisis-hit countries have taken similar steps to simplify transactions and restore public confidence. 

Iran recently cut four zeros from its Rial, while Syria is preparing to remove two. Turkey in 2005 eliminated six zeros from its lira, a move initially hailed as a success but later undermined by poor economic management that sent the currency tumbling again in 2018.

In Lebanon, financial experts warn that simply removing zeros will not solve the underlying crisis unless accompanied by sweeping reforms. They say restoring trust in the lira requires stabilizing its exchange rate and preventing a repeat of the collapse. 

Essential steps include restructuring public finances and tackling the country's massive debt, reforming the banking sector, and enacting economic measures that can attract fresh foreign currency inflows.

Last April, Lebanon's parliament approved legislation to issue larger banknotes above the current 100,000-lira bill to ease cash transactions. The measure is still pending technical procedures before circulation begins.

While redenomination could simplify accounting and reduce the burden of handling piles of cash, analysts caution that Lebanon's path to currency stability remains long. 

As much of the world moves toward digital currencies, Lebanon continues to grapple with paper money and an economy weighed down by zeros.