The meeting focused on how a Currency Board could operate in Lebanon, whether the model is suited to the country's current economic conditions and what role it could play alongside broader banking, fiscal and structural reforms.
Ray Dabbane, founder of the National Initiative for Monetary Stability and Founder and CEO of Invus, presented the proposal, arguing that Lebanon needs to move away from discretionary monetary policy toward a rules-based framework that can provide greater predictability and discipline.
Dabbane said a Currency Board would operate under binding monetary rules, with the relevant monetary base fully backed by liquid foreign reserves and the currency convertible at a fixed exchange rate. Under such a system, monetary issuance could not be used to finance government deficits or bail out banks.
“Lebanon needs to move from managing monetary stability through discretionary policies to a system governed by clear and binding rules,” Dabbane stated.
“A Currency Board can provide a framework for enforcing monetary discipline and shielding monetary stability from political pressures, strengthening the credibility of the Lebanese pound and providing a more solid foundation for economic recovery,” he added.
Dabbane stressed that the proposal should not be viewed as a substitute for the wider reforms needed to address Lebanon's economic and financial crisis.
“A Currency Board is not a substitute for the banking, fiscal and structural reforms Lebanon requires,” he said. “It provides a stable monetary environment in which those challenges can be addressed.”