From Stability to Collapse: How Lebanon’s Exchange Rate Broke after 22 Years of Calm
The Lebanese pound looked boringly stable.
On paper, it was a success story. A flat red line that looked safe, predictable, and almost felt untouchable and unchangeable. But beneath that reassuring flatness laid a system that was quietly breaking apart.
In this visualization, I trace the Lebanese pound (LBP) against the US dollar from the 1970s until today, splitting the story into three distinct eras: the Pre-Fixed Rate Era in yellow, the Stability Era with the official peg in red, and the Crisis Era in blue, where everything unraveled. The goal is not just to show numbers, but to reveal how a long period of apparent stability can mask growing fragility.
Before the peg: A fragile build-up (1970-1997)
The story starts in the 1970s and 1980s, shown in yellow. During this period, the Lebanese pound gradually weakens against the dollar. The line climbs steadily from near-flat values to over 1,500 LBP per USD by the mid-1990s.
What is important and alarming here is the direction of the climb: the Lebanese pound keeps losing value. There is no stability yet, only a slow, visible decline.
By 1997, the rate reaches 1,507.5, which becomes the famous official peg. That point is annotated on the chart because it marks a turning point: from moving exchange rate to a fixed one.
The illusion of stability (1997–2018)
From 1997 to 2018, the line turns red and becomes almost perfectly horizontal.
During those 22 years, the official rate stays pegged at 1,507.5 LBP per USD.
Visually, this flat line had been sending a powerful message which is “The currency is under control and Your money is safe.”
But a flat line doesn’t mean a healthy system. In fact, the opposite was happening. Behind that reassuring red line, public debt was climbing relentlessly. Budget deficits were widening. The entire economy had become dependent on fresh dollars flowing into the banking sector to maintain the illusion. The system was running on borrowed time and borrowed money.
The visualization deliberately keeps this middle section clean: one color, very few marks, a high data-ink ratio. The flatness is visually reassuring. And that’s precisely the problem. The chart shows us exactly what Lebanese citizens saw: a promise of stability that felt permanent. What it didn’t show is what couldn’t be seen in the numbers, was the invisible rot beneath the surface that was forming.
The collapse: 2019 onwards
The calm ends abruptly at 2019, marked with an annotation: “Banking crisis begins.” At first, the rate moves only slightly, from 1,507.5 to around 1,540 LBP per USD. A tiny change after decades of flatness. Barely noticeable.
But this small kink is the first visible crack. The system couldn’t hold.
From 2020 onwards, the line turns blue and shoots upward exponentially. By 2021, the value plummets to around 5,811 LBP per USD which is more than four times the official peg. The curve becomes nearly vertical, showing a visual representation of lost control and shattered trust. Instead of a slow, manageable depreciation, Lebanon experiences a collapse.
This is where the chart stops being just macroeconomics. Each point on that blue line isn’t an abstract number. It’s a family at the supermarket realizing their money buys half as much as last month. It’s a teacher whose salary, once stable, can barely cover rent. It’s life savings that quietly disappear, not because they were spent, but because their value evaporated overnight.
Insights:
What began as a flat, boring line became the steepest crisis in decades. The Lebanese pound went from appearing to be one of the world’s most stable currencies to becoming a cautionary tale of currency collapse.
The visualization tells us something important about systems, trust, and stability itself: a flat line maintained by freezing numbers rather than fixing underlying problems is not stability at all. It’s a mirage. And when mirages disappear, people lose more than just money—they lose faith in the institutions meant to protect them.
The real story isn’t in the numbers. It’s in what the numbers hide, and what happens when the hiding is no longer possible.