Lebanon's central bank governor, Riyadh Salameh, said Lebanon will introduce a new official exchange rate of 15,000 pounds to the dollar on Feb. 1, representing a 90% devaluation from the current official exchange rate that has not changed in 25 years.

The difficult but long overdue decision to move from the old rate of 1,507 to 15,000 is still a long way from a parallel market, with GBP/USD changing hands around 57,000 as of yesterday.

The adjustment to 15,000 was to close the heavy arbitration among multiple exchange rates in line with Lebanon's draft agreement with the International Monetary Fund last year that set out the terms for the release of a $3 billion bailout.

Several rates still exist, including the official rate, the central bank's Sayrafa rate (currently £38,000 to $1) and a parallel market rate.

The IMF advocated immediate interest rate coordination, saying Lebanese authorities should front-load an estimated $70 billion in financial sector losses widely seen as the result of decades of waste, corruption and mismanagement.

The IMF deal is widely seen as the only way for Lebanon to begin restoring confidence in its financial system and recover from the collapse.

The change in the exchange rate is not expected to ease one of the most debilitating aspects of the crisis for ordinary Lebanese – the inability to freely access their dollar savings.

While capital controls have never been formally imposed in Lebanon, banks since 2019 have imposed their own controls, severely limiting withdrawals in dollars and Lebanese pounds.