The new rate represents a 90% devaluation from the current official rate of 1,507, which has remained unchanged for 25 years.
However, this new rate is still far from the parallel market rate, where the Lebanese pound was exchanging hands at around 57,000 per US dollar on Tuesday.
The change in the official exchange rate will apply to banks, and this will result in a decrease in the equity of these institutions, which were at the center of the country’s financial implosion in 2019.
Despite this, analysts believe that the shift will have less impact on the wider economy, which is increasingly dollarized and where most transactions take place according to the parallel market rate.
The Lebanese pound has lost about 97% of its value since it started to split from the 1,507 rate in 2019.
Salameh told Reuters that commercial banks in the country will see a decrease in their equity, as it will be translated into dollars at the new rate of 15,000 instead of the old rate of 1,500.
To mitigate the impact of this shift, banks will be given five years to reconstitute the losses caused by the devaluation.
The change to the new exchange rate of 15,000 is an attempted step towards unifying the country’s multiple exchange rates, in line with a draft agreement Lebanon reached with the International Monetary Fund last year.
This agreement set out conditions for unlocking a $3 billion bailout for the country.