From the Collapse of the Lira to the Beginning of Stabilization

At the beginning of the 1990s, Lebanon entered a new economic phase after years of war and financial collapse. Despite renewed economic activity and 57% GDP growth in 1991, public spending and debt continued to rise, while Banque du Liban’s ability to defend the lira weakened. By August 1992, the dollar had reached a record 2,775 Lebanese pounds. But with the formation of Rafic Hariri’s government and the appointment of Riad Salameh as governor in 1993, a new phase began—one focused on stabilizing the exchange rate and rebuilding confidence in the banking sector. It brought monetary stability but also paved the way for growing public debt and increased state financing.