The unique dollarization case of Lebanon
Document type :
Compte-rendu et recension critique d'ouvrage
Title :
The unique dollarization case of Lebanon
Author(s) :
Journal title :
Economic Systems
Pages :
100765
Publisher :
Elsevier
Publication date :
2021-06
ISSN :
0939-3625
English keyword(s) :
Dollarization
Emerging markets exchange rate regimes
Sterilization
International reserves
Lebanon
Emerging markets exchange rate regimes
Sterilization
International reserves
Lebanon
HAL domain(s) :
Sciences de l'Homme et Société/Economies et finances
English abstract : [en]
We perform a thorough analysis of the unique dollarization case of Lebanon, a heavily dollarized economy with recurring public deficits and monetary financing of the public debt, together with contained inflation and a de ...
Show more >We perform a thorough analysis of the unique dollarization case of Lebanon, a heavily dollarized economy with recurring public deficits and monetary financing of the public debt, together with contained inflation and a de facto fixed exchange rate lasting for more than 20 years. What makes Lebanon’s case specific is the high level of foreign currency liquidity in the hands of the banking system due to the abundant capital inflows in the last three decades, and the high levels of the central bank’s gross international reserves, contrasting with its low and sometimes negative levels of net international reserves. We shed light on a number of areas that have so far been unexplored in international finance and monetary economics, mainly the difference between gross and net international reserves and their relative fiscal costs, together with a synthetic classification of sterilization techniques. We explain the monetary “freezing” mechanism that helped contain inflation in Lebanon, despite the monetary financing of the country’s recurring public deficits. We also assess the results of Lebanon’s monetary and exchange rate policy in the last two decades, and make a number of policy recommendations in light of previous studies.Show less >
Show more >We perform a thorough analysis of the unique dollarization case of Lebanon, a heavily dollarized economy with recurring public deficits and monetary financing of the public debt, together with contained inflation and a de facto fixed exchange rate lasting for more than 20 years. What makes Lebanon’s case specific is the high level of foreign currency liquidity in the hands of the banking system due to the abundant capital inflows in the last three decades, and the high levels of the central bank’s gross international reserves, contrasting with its low and sometimes negative levels of net international reserves. We shed light on a number of areas that have so far been unexplored in international finance and monetary economics, mainly the difference between gross and net international reserves and their relative fiscal costs, together with a synthetic classification of sterilization techniques. We explain the monetary “freezing” mechanism that helped contain inflation in Lebanon, despite the monetary financing of the country’s recurring public deficits. We also assess the results of Lebanon’s monetary and exchange rate policy in the last two decades, and make a number of policy recommendations in light of previous studies.Show less >
Language :
Anglais
Popular science :
Non
Collections :
Source :