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History of The Lebanese Pound
BANKNOTES COLLECTION
MODERN BANKNOTES
COINS COLLECTION - 1
COINS COLLECTION - 2
COINS COLLECTION - 3
COINS COLLECTION - 4
COINS COLLECTION - 5
GOLD OF LEBANON
ISLAMIC COINS
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Period 1: "National Bank of Egypt" : Pre 1919
Following the downfall of the Ottoman Empire in September 1918, the Turkish Pound was replaced by a Sterling based Egyptian currency as legal tender in the states under the French and British mandate. The Egyptian Pound was issued by a private British institution, the National Bank of Egypt, and had been previously used by the British, since much of their supplies were from Egypt.
After taking Lebanon and Syria under its mandate, the French government sought the substitution of the Egyptian currency in order to alleviate the burden on the French Government in covering its expenditures in Egyptian Pound, and to assert its independence from the British. However, the use of the post war French Franc would have further exhausted the French Treasury.
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Period 2: "The Banque de Syrie" : 1919-1924
The Banque de Syrie, a French company affiliate of the Ottoman bank, was established in 1919 with an initial capital of FF. 10 million, later increased to FF. 25.5 million. Of its 51,000 shares, about 22% were owned by the Ottoman bank and 78% by French shareholders.
The Banque de Syrie took over the function of the Ottoman bank to issue the new Syrian currency after World War I, in substitution for the official currency - the Egyptian currency- in the States under the French Mandate, and in accordance with the Paris agreement held in April 1919 between the Bank and the French Minister of Finance.
The issuing of the Syrian currency was covered by a French Franc credit account opened for these states at the French Treasury, and by French government bonds. The rate of the Syrian Pound was fixed at FF. 20 to the Syrian pound, and could only be redeemed at the main office in Paris.
However, it was not until March 1920 that the Syrian currency was officially recognized as legal tender and compulsory unit of contract, by decree from the high Commissioner of the French Republic.
Meanwhile, Lebanon and Syria had acquired about 60% of the 8,000 Banque de Syrie shares (16% of total) which had been offered to the public.
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Sample Monetary of this period
Issued in Beyrouth |
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Period 3: "The Banque de Syrie et du Liban" : 1924-1964
In January 1924, a convention was signed between the Banque de Syrie, on the one hand, and Lebanon and Syria as States under the French Mandate, on the other hand, following the constitution of their national government.
As the political status of Lebanon evolved, the Banque de Syrie, which was to act as the official bank of the states under the French Mandate, was renamed the Banque de Syrie et du Liban (BSL).
BSL was granted the following privileges by the 1924 Convention including:
n The sole right to issue the French-based-Lebanese-Syrian currency in Lebanon and Syria for 15 years, at FF. 20 to the pound. These could be redeemed at the main office in Paris or its branch in Marseilles.
n Special rights regarding securities pledged as loan guarantees.
n The sole custody of Government funds.
n Preference for its services with local governments.
Against these privileges, BSL agreed to pay the Lebanese and Syrian governments, on a yearly basis, part of its profits as a percentage of the quantity of currency in circulation which should not exceed 25,000,000 pounds, and accept local representatives in its board of directors and consultative committee. It also distinguished between an Issue Department, and a Banking Department.
The issue of the Lebanese-Syrian currency were governed by the 1924 Convention and covered by:
n Gold and convertible foreign government bonds.
n Commercial papers.
n Mandatory French Franc interest earning deposits.
n Other (option) French Franc demand deposits.
n Claims drawn on or guaranteed by the French government.
Two years before the expiry of the 1924 Convention, BSL's privilege to note issue a Lebanese currency in Lebanon, separate from the Syrian currency, was extended for another 25 years by the 1937 Convention, ending in March 1964.
The notes issued by BSL were no longer subject to a ceiling but were subject to an obligatory and optional coverage. They were of two series; one carrying the name "Liban" and the other "Syrie", but both could be used indiscriminately in either state.
Although the currency was Lebanese in name, it remained a disguised French Franc, until 1941 when it was linked to the Sterling Pound after the defeat of France and the invasion of Lebanon by allied forces. However, the coverage of the Lebanese Pound issues was still in French Francs, which was constantly depreciating or devaluated.
Lebanon was to collect any loss in the value of its assets in French Francs covering the issue of Lebanese notes by the Franco-British agreement of the 1944. The corresponding burden on France and Lebanon's will to achieve monetary independence, necessitated a dissociation between the Lebanese Pound and the French Franc.
Following the independence in 1943, Lebanon concluded a monetary agreement with France in the 1948 separating its national currency from the unstable French Franc, and asserted the independence of its monetary system by promulgating the Monetary Law of 1949.
Lebanon also sought the libanization of BSL. A council, known as the Council of Money and Credit was formed to devise the Code of Money and Credit and the bylaws of the future Central Bank of Lebanon, the Banque du Liban.
Concurrently, the distinction between the Issue Department and the Commercial Department was fully effected. In April 1963, a commercial bank, the Societe Nouvelle de la Banque de Syrie et du Liban s.a.l. was created to replace the Commercial Department, and in April 1964, the Issue Department was transformed into the Banque du Liban.
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Sample Monetary of this period |
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Period 4: "Banque du Liban" : 1964-Present
Banque du Liban (BDL) was created by the Code of Money and Credit enacted by decree no. 13513 dated August 1, 1963. It started its effective operations on April 1, 1964.
BDL is a legal entity of public law enjoying financial and administrative autonomy but is not subject to administrative regulations and supervisions applicable to the Public sector.
Its initial was LL. 15,000,000, an amount appropriated by the State.
BDL is the sole custodian of the public funds and is vested by law the exclusive privilege of issuing the national currency.
BDL includes an administrative body and a managerial body, as well as other specialized entities. It is supervised by the Government Commissariat.
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Sample Monetary of this period |
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