Dollarization sustainability in Lebanon
DOI:
https://doi.org/10.18559/rielf.2025.1.2447Keywords:
dollarization, exchange rate regime, central bank, LebanonAbstract
Purpose - The objective of this article is to identify the dollarization process that began in Lebanon with the hyperinflation and the strong depreciation of the eighties and which reflects an inertia, or even an acceleration with the multidimensional crisis that the country has been experiencing since October 2019. Following the normalization of the current situation thanks to a dollarization that has become almost complete and almost official, the main question that arises concerns the factors of sustainability and sustainability of a possible complete officialization of dollarization.
Design/methodology/approach – The paper adopts an evaluative research approach to explain the determinants of the irreversibility of dollarization with an addiction to the US dollar, to highlight the necessary factors of sustainability of full official dollarization, and to specify the key structural reforms that could be necessary for the sustainability of dollarization in Lebanon. The research methodology is based on a philosophy oriented towards post-positivism and a hypothetico-deductive research approach where the hypothesis can be deduced from an already formulated theory, from previous works or deduced by analogy.
Findings – The results show that the success of full dollarisation requires the achievement of a range of monetary, budgetary, legislative conditions requiring a national consensus and comprehensive reforms.
Originality/value – The main value of the work with the opening of the debate on dollarization in the Lebanese parliament allows to visualize the conditions of its success beforehand especially since it is an irreversible process and to draw the necessary lessons for any other country experiencing a similar experience.
JEL Classification
Central Banks and Their Policies (E58)
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