Money works as a medium of exchange, in part because its value is mutually agreed on in transactions. Lebanon is now reckoning with the economic consequences of when that is no longer true. It has been a long time since Lebanese knew the actual value of their money. There are, at the moment, at least four vastly different exchange rates at which the Lebanese pound (LBP) is exchanged into U.S. dollars (USD). The result is a daily struggle with misery and absurdity.
In 1997, the pound was pegged to the dollar at the rate of 1,500 to 1, and the two were used interchangeably on that basis until October 2019. But after the country slid into an economic crisis a year and a half ago, the currency lost its value steeply on the open market, losing 80 to 90 percent of its worth, even as the official rate stayed stuck at its 1997 peg.
