Hyperinflation/Archive

Cases / The 21st century / Lebanon

Lebanon
2019–2023

For 22 years the pound was pegged at 1,507.5 to the dollar. The peg was held up by deposits that banks lent to the central bank, which used them to fund the state, under a system its critics compare to a Ponzi scheme.

52.6% (implied)prices in the worst monthJuly 2020
Jul 2020 (implied, Hanke)above 50% a monththe hyperinflation itself
1banknotes in the collectionLebanese Pound

Currency reform: None — the pound still runs · Cause: Banking collapse behind a fixed peg · Resolution: Stable rate since mid-2023; deposits still frozen

In short

In 2019 the dollars stopped coming. Banks froze withdrawals, the state defaulted (March 2020), and the parallel rate went from 1,500 to about 140,000 in March 2023. Steve Hanke counted it as hyperinflation no. 62, at 52.6 % a month (implied) in July 2020. Official monthly inflation never reached 50 %, but annual inflation reached 221 % in 2023.

The curve

Lebanese Pounds per 1 USD (parallel market rate), logarithmic scale: each line up is many times the one below.

1,000 10,000 100,000 1 million 2020 2021 2022 2023 2024 2019-07: 1,600 2019-10: 1,700 2019-12: 2,100 2020-04: 3,000 2020-06: 5,000 2020-08: 7,500 2020-12: 8,500 2021-03: 14,000 2021-06: 15,200 2021-08: 19,000 2021-12: 27,000 2022-06: 27,500 2022-11: 37,000 2023-02: 63,000 2023-03: 134,900 2023-07: 90,000 2023-12: 89,500 2024-05: 89,600

Pegged at 1,507.5 pounds per dollar from 1997 to October 2019. Parallel rate: about 140,000 at its peak in March 2023, stable near 89,500 since mid-2023. Inflation was 221% in 2023 (Wikipedia). Source: DolarToday Lebanon (lebanese-lira.org), Lira Rate, BLOMINVEST Bank.

What happened

The events in order, with the banknotes at the date on them.

1997
The peg at 1,507.5.
Aug – Oct 2019
A dollar shortage, the October protests, and informal capital controls by the banks.
Mar 2020
Default.
Jul 2020
Hanke: 52.6 % a month (implied), hyperinflation no. 62.
4 Aug 2020
The port explosion.
dated
2021
10,000 Lebanese pounds (2021)
10,000 Lebanese pounds (2021)
Jun 2021
The World Bank warns that this could be one of the three most severe crises since the mid-19th century.
Feb 2023
The official rate is moved to 15,000.
Mar 2023
The parallel peak, about 140,000.
Since mid-2023
About 89,500, stable; the economy runs largely in dollars.

Context: why it happened

  • "Financial engineering" by the Banque du Liban from 2016 onwards: it swapped pound debt for Eurobonds and paid banks high returns for dollars. The IMF estimates the banks gained $5 billion and the central bank lost $13 billion in reserves (Wikipedia).
  • Twin deficits (fiscal and current account) financed by deposit inflows that stopped in 2019.
  • Political paralysis, then the Beirut port explosion of 4 August 2020.

Where it stands

The rate has been stable since mid-2023 at about 89,500 per dollar, so the site closes the period at 2023.

Consequences & lessons

  • A peg is only as strong as the money behind it. Here, "behind it" meant depositors' savings, which had been lent to the state.
  • It is the bank-run version of hyperinflation. The money did not come from a printing press first: it disappeared inside the banking system.

The banknotes

10,000 Lebanese pounds (2021)
10,000 Lebanese pounds (2021)

The data

Savings worth $1,000 in July 2019, kept in Lebanese Pound, were worth $18 in May 2024.

figurevaluesource
Peg1,507.5 LBP/USD, 1997 – Oct 2019Wikipedia (Lebanese liquidity crisis)
Hyperinflation52.6 %/month, implied (from the parallel rate, PPP), Jul 2020 — no. 62Hanke, Cato (2020)
Parallel rate1,600 (Q4 2019) · 3,000 (Apr 2020) · 14,000 (Mar 2021) · 15,200 (Jun 2021)Wikipedia (Lebanese liquidity crisis)
Annual inflation, 2023221.3 %Wikipedia (Lebanese liquidity crisis)
DefaultMar 2020, the first in the country's historyWikipedia (Lebanese liquidity crisis)
The series, point by point
Monthper $
2019-071,600
2019-101,700
2019-122,100
2020-043,000
2020-065,000
2020-087,500
2020-128,500
2021-0314,000
2021-0615,200
2021-0819,000
2021-1227,000
2022-0627,500
2022-1137,000
2023-0263,000
2023-03134,900
2023-0790,000
2023-1289,500
2024-0589,600
Case data (JSON)Series (CSV)Banknotes (ZIP)
Cite this case
“Lebanon 2019–2023”, Hyperinflation Archive, hyperinflation.rogzy.org/lebanon-2019-2023/ (2026). Figures: Hanke & Krus (2012) and the sources listed below.

Sources

  1. Wikipedia, "Lebanese liquidity crisis" (read 2026-10-05): https://en.wikipedia.org/wiki/Lebanese_liquidity_crisis
  2. Hanke, S. H. (2020), "Lebanon Hyperinflates", Cato Institute: https://www.cato.org/commentary/lebanon-hyperinflates

H&K = Hanke, S. H. & Krus, N. (2012), World Hyperinflations, Cato Institute Working Paper no. 8.