By Invitation:
This spotlight was prepared by the late Professor Samih Azar (1956-2023), who passed away on 20/2/2023. Professor Azar was a distinguished economist and a remarkable human being. He was also an excellent contributor to the Blog. He will always be remembered and deeply missed.
The spotlight is slightly on the technical side.
According to circular # 151 of the central bank, Banque du Liban, monthly dollar withdrawals are authorized from dollar deposits and are convertible to Lebanese pounds at the pre-specified rate of LBP 8,000 per US dollar. The figure of LBP 8,000 is known as the “lollar” benchmark rate. It is due to be readjusted to LBP 15,000 per US dollar starting on the first day of February 2023, with a maximum monthly withdrawal of USD 1,600. The purpose of this note is to find out whether there is an optimal lollar benchmark rate, and if yes how much it is, and on what does it depend. This will serve to understand and eventually to rationalize the underlying policy.
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