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Before the First World War, Lebanon and Syria were part of the Ottoman
Empire and the Turkish pound was the legal tender. Following the downfall of the Ottoman
Empire in September 1918, the Turkish pound was replaced by a sterling-based Egyptian
currency (issued by a private British institution) as legal tender in the states under the
joint French and British mandate. Upon taking Lebanon and Syria under its separate
mandate, the French Government sought to replace the Egyptian currency and granted a
commercial bank - the Banque de Syrie, a French affiliate of the Ottoman Bank - the
authority to issue a currency for states under its new mandate, namely the new Syrian
currency.
As the political status of Lebanon evolved, the Banque de Syrie, which
was to act as the official bank for Lebanon and Syria, was renamed the Banque de Syrie et
du Liban (BSL). The BSL was granted the sole right to issue a French franc based
Lebanese-Syrian currency in Lebanon and Syria for 15 years starting in January 1924. In
1937, two years before the expiry of the 15-year period, the BSL was extended for another
25 years to issue in Lebanon a Lebanese currency separate from the Syrian currency, both
of which could be used interchangeably in either state. Although the currency was Lebanese
in name, it remained a disguised French franc until 1941, when it was linked to the pound
sterling after the defeat of France and the invasion of Lebanon by the allied forces.
Following its independence in 1943, Lebanon concluded a monetary agreement with France in
1948 separating its national currency from the unstable French franc ( Law of May 24th,
1949 ). Lebanon sought the lebanisation of the BSL. A council known as the Council of
Money and Credit was formed to draw up the Money and Credit Code and the by-laws of
Lebanon’s future central bank, the Banque du Liban (BDL).
The legal tender is the Lebanese pound. There are 14 denominations of
banknotes issued by the BDL: the LBP 1, 5, 10, 25, 50 and 100 denominations were issued in
1964, LBP 250 in 1978, LBP 500 and 1,000 in 1988, LBP 10,000 in 1993, and 5,000, 20,000,
50,000 and 100,000 in 1994. Coins of LBP 100, 250, and 500 denominations were introduced
in late 1995, and the LBP 50 came out in August 1997.
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