The pound is the official currency of Lebanon. It is also known as the livre libanaise in French and the lira in Arabic, the two languages printed on the banknotes. This decimal currency is subdivided into 100 piastre. However, the lowest denomination in circulation is 50 pounds. The Lebanese pound was first introduced in 1924, but it has undergone several changes and revaluations since that time. The Banque du Liban has issued the Lebanese pound since 1964.
At the beginning of the 20th century, the Ottoman lira was the official currency of Lebanon, but after the fall of the Ottomans during World War I, the Egyptian pound was adopted. When the French seized control of Syria and Lebanon in the 1918, the Syrian pound was imposed as the official currency of both countries. The Syrian pound was pegged to the French franc at a rate of 1 pound: 20 francs. France allowed Lebanon to print their own banknotes and mint their own coins, and in 1939, the Lebanon and Syrian pounds became two distinct currencies. The Lebanese pound was pegged to the franc, but after World War II, the International Monetary Fund took control of the exchange value. Today, the Lebanese pound is secured by gold and U.S. dollar reserves, but a peg to the euro is under consideration.
The economy of Lebanon has not fully recovered from the devastating civil war that took place from 1975 until 1991. By the end of the war, production in the country was half of what it was at the start. In addition, Lebanon was a banking hub of the Middle East before the war, and it is predicted that this position will not be regained. In order to initiate recovery, large sums were borrowed by the country, and national debt remains a problem. In 2002, Lebanon officially sought out aid from international donors in an attempt to restructure the economy, reduce debt and lower interest rates, but afterward, debt still stood at 180 percent of the GDP. Another short-lived war in 2006 hurt the economy further. However, a full recovery is forecast due to Lebanon’s agriculturally fertile land and a growing tourist industry. The strict regulations of the Banque du Liban allowed the financial sector to emerge from the worldwide financial crises of 2008 unscathed, and it was one of only seven nations to experience growth in the stock market during that year.