Crisis-ridden Lebanon, the country that investors peg as the riskiest in the world, saw its money supply multiply by more than five times in just a single month.

The nation’s M4 measure of notes in circulation and bank accounts jumped 439 percent in January from December 2023, when it had risen a modest 0.1 percent, according to Banque du Liban. The sudden expansion follows policymakers’ decision to unify multiple exchange rates and move to one that’s closest to the parallel market.

While monetary expansion typically fuels inflation — and Lebanon has one of the highest rates of price rises at 123 percent — the move may be a small step toward rescuing the Middle Eastern nation from its worst economic crisis in history. It helped authorities to bring the official exchange rate closer to reality and move a bit closer to unlocking a $3 billion International Monetary Fund (IMF) loan.

In mid-February, the central bank set the pound at 89,500 Lebanese pounds per US dollar, replacing the official rate of 15,000, according to its latest balance sheet. The pound has traded in the black market at about 89,500 pounds for more than six months.

While that normalized the currency market, the IMF deal requires authorities to take further measures before disbursement can begin. Among them are the adoption of capital controls and restructuring and auditing of the banking sector — reforms the IMF said Lebanon has been “very slow” in implementing.

The small Mediterranean country is in the grips of a crisis rooted in decades of corruption and mismanagement. Lebanon defaulted on $30 billion in international debt in March 2020 and saw its economy crater. Investors in the dollar-bond market demand a sovereign risk premium of more than 35,400 basis points above Treasury yields to buy the country’s notes — the highest in the world.

Kristalina Georgieva, the IMF managing director, said in February that the lender is worried about the impact of the Israel-Hamas war on Lebanon amid the risk of war spreading in the region.

Hezbollah in Lebanon has traded fire with Israeli troops almost daily. The Lebanese economy, which heavily depends on tourism revenues, would be “negatively impacted most dramatically” if the war expands in the Middle East, Georgieva said.