Lebanon’s smaller banknotes are rapidly disappearing from circulation as the country’s economic collapse has rendered them practically worthless, with businesses and consumers alike increasingly refusing to use them.

The once-common 1,000, 5,000, and 10,000 Lebanese pound notes have little purchasing power following years of currency depreciation. Since Lebanon’s financial crisis erupted in 2019, the pound has lost more than 98% of its value, pushing prices higher and making smaller denominations obsolete.

Many may be surprised to learn that the central bank last printed 5,000 and 10,000-pound notes in 2021, when the exchange rate fluctuated between 10,000 and 45,000 LBP per U.S. dollar. At the time, the cost of printing these notes remained lower than their face value, but today, with the exchange rate hovering around 89,500 pounds per dollar, producing them has become economically unviable.

In April 2021, Lebanon’s central bank printed new 5,000-pound notes at a time when their actual value was significantly higher than the cost of production. Back then, printing 1,000 sheets of 5,000-pound notes cost approximately $60, while their total value equaled 5 million pounds—about $400 at the prevailing exchange rate. Even then, the printing cost was considered high relative to the note’s worth.

If the central bank were to print new 5,000-pound notes today, the cost would exceed their actual value, which now stands at just $55.80 per 1,000 sheets. The situation is even worse for the 1,000-pound note—printing 1,000 sheets costs around $60, while their total value is only 1 million pounds, or roughly $11.17.

As a result, Lebanon’s central bank is unlikely to print additional small-denomination banknotes.

Higher-value banknotes still retain an actual worth greater than their production cost, but printing them remains expensive when factoring in additional expenses such as transportation. Lebanon does not print its own currency domestically and relies on foreign printing firms in countries such as Russia, Germany, and Malta. Lebanese banknotes are known for their high security features and durability, making their production costly.

Many retailers have already stopped accepting smaller banknotes, particularly the 1,000, 5,000, and 10,000-pound bills. Some businesses have even refused transactions involving the 20,000-pound note, fearing potential losses if the central bank decides to discontinue them.

This mirrors what happened in 2019 when small coin denominations, such as the 500 and 250-pound coins, disappeared from circulation. Although the central bank never officially withdrew them, businesses and consumers gradually abandoned them due to their diminished value.

A banking source told Reuters that the central bank may take a similar approach with small-denomination banknotes, allowing them to fade from circulation without an official withdrawal. Instead of printing new batches to replace worn-out notes, authorities are expected to let these denominations disappear entirely.

With the Lebanese pound’s continued devaluation, some have proposed printing larger banknotes—such as 250,000, 500,000, or even 1 million-pound notes—to facilitate transactions. However, financial experts warn that such a move could trigger panic and further depreciation of the currency.

“Printing larger bills is not necessarily linked to inflation, but it could have a psychological impact similar to removing zeros from a currency,” a banking source told Al Modon. “Issuing high-value notes at this stage could fuel fears of further devaluation, prompting people to rush to buy U.S. dollars, further weakening the pound.”

Financial experts argue that before issuing larger denominations, Lebanon must first implement economic reforms and restore public confidence in monetary policies.

Discontinuing existing banknotes, printing new ones, or redenominating the currency is not a straightforward process. Such changes require legal amendments to Lebanon’s Code of Money and Credit, which grants all existing denominations legal tender status. Any modification would need parliamentary approval.

In 2023, the central bank explored issuing 500,000 and 1 million-pound banknotes, but the plan stalled due to legal constraints and political opposition. Some officials feared that introducing higher denominations would accelerate the pound’s collapse.

For now, Lebanon’s smaller banknotes appear to be on their way out—not through official policy but through market forces that have rendered them increasingly irrelevant.

This is an English adaptation of an Arabic article posted by Al Modon.