Beirut: International monetary experts argued that a Currency Board could provide Lebanon with a credible framework for restoring monetary stability, during a symposium held under the patronage of Banque du Liban Governor Karim Said and hosted by Invus Chairman Ray Debbane. The event brought together three prominent figures in international monetary policy: Jacques de Larosi¨re, former Managing Director of the International Monetary Fund and former Governor of the Banque de France; Professor Steve Hanke of Johns Hopkins University, who has advised several governments on Currency Board systems; and John Greenwood, the architect of Hong Kong's Currency Board.
According to National News Agency - Lebanon, across three panel discussions moderated by Debbane, the speakers examined whether a rules-based monetary regime could help Lebanon emerge from years of financial and monetary instability. The participants argued that Lebanon's crisis extends beyond exchange-rate volatility, reflecting a broader collapse in confidence in monetary institutions and policymaking. According to the panel, prolonged fiscal deficits financed through the central bank, discretionary monetary policy, and repeated interventions in the foreign exchange market have undermined confidence in the Lebanese pound.
The proposed Currency Board model would legally peg the Lebanese pound to a stable foreign currency while requiring every unit of domestic currency in circulation to be fully backed by foreign exchange reserves. Under such a system, the monetary authority would no longer finance government spending or exercise discretionary control over money creation. The speakers described the mechanism as a structural reform rather than a temporary stabilisation measure. They argued that Lebanon's high level of dollarisation makes implementation technically feasible, estimating that approximately $700 million worth of Lebanese pounds remain in circulation. Including a prudential buffer, they estimated reserve requirements of roughly $800 million-an amount they said could be covered without drawing on the country's gold reserves.
One of the central themes of the symposium was sequencing. While Lebanon's banking sector remains deeply impaired, the panel argued that restoring monetary credibility should precede wider financial-sector reforms. According to the speakers, a stable monetary framework would create conditions more conducive to bank restructuring, renewed capital inflows, and private investment, although they acknowledged that a Currency Board would not itself resolve legacy banking losses or compensate holders of trapped dollar deposits, commonly referred to as "lollars."
Drawing on the experiences of Estonia, Lithuania, Bulgaria, and Bosnia and Herzegovina, Hanke argued that Currency Boards have historically restored confidence rapidly by reducing inflation, lowering interest rates, and encouraging the return of deposits and foreign investment. Greenwood highlighted Hong Kong's four decades of monetary stability under its Currency Board arrangement, arguing that rules-based monetary systems derive their resilience from limiting discretionary policy decisions, even during periods of financial stress.
De Larosi¨re said Lebanon shares several characteristics with economies that have successfully adopted Currency Boards, including its openness, dependence on imports, remittances, and external capital flows. He also argued that such a framework would be compatible with, rather than an alternative to, an IMF-supported reform programme, with the Currency Board providing monetary discipline while the IMF focused on fiscal, structural, and banking-sector reforms.
The symposium concluded that the principal barriers to implementation are political rather than technical. The participants argued that the legal framework, institutional structure, and reserve requirements could all be established within an existing reform programme, leaving political consensus as the remaining challenge. The event also marked the launch of the National Initiative for Monetary Stability, a platform intended to bring together economists, policymakers, and business leaders to develop proposals aimed at restoring confidence in Lebanon's monetary and financial system.