Lebanon is ready to terminate a 23-year-old dollar peg and float the pound, but only after it secures billions in aid, Finance Minister Ghazi Wazni said Friday.
Speaking to AFP after talks started Wednesday with the International Monetary Fund on a plan to rescue Lebanon's crisis hit economy, he also said banking sector restructuring would entail halving the number of lenders. Foreign exchange shortages have in recent months severely strained the official rate of 1,507 to the dollar, with the pound losing well over half its black market value to trade at considerably beyond 4,000 against the greenback.
"The IMF always asks for the freeing of the pound's exchange rate," Wazni said. But "we need to change the stabilisation policy to one of a flexible exchange rate in a first stage and for the foreseeable future," he said, referring to an initial managed flotation.
"When we receive financial support from abroad, we will transition to flotation" dictated by the market, he said. "The Lebanese government has asked for a transitional period to pass through a flexible exchange rate before we reach flotation," he added.
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