Lebanon has maintained the same exchange rate between the Lebanese pound and the U.S. dollar for more

Question:

Lebanon has maintained the same exchange rate between the Lebanese pound and the U.S.

dollar for more than 20 years. While some argue that continuing with this system is unsustainable for the central bank, others fear that Lebanon’s political situation might lead to a crisis if this system is discontinued.

Source: executivemagazine.

com, July 16, 2015

a. What is Lebanon’s current exchange rate policy?

b. Why might this policy be unsustainable for the central bank? What could be the consequences of changing it amid political instability?

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Economics

ISBN: 9781292433639

14th Global Edition

Authors: Michael Parkin

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Lebanon has maintained the same exchange rate between the Lebanese pound and the U.S. dollar for more

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Step by Step Answer:

a Lebanons current exchange rate policy as of the information provided up to 2015 was a fixed exchange rate also known as a pegged exchange rate This ...View the full answer

Economics

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