Untangling the puzzle: how central bank interventions drive currency hyperinflation and hamper SMEs

This study undertakes an assessment of the actions taken by the Governor of the Lebanese Central Bank in response to the economic crisis in Lebanon, with a specific focus on the long-standing pegging of the Lebanese economy to the US Dollar since the 1990 s. The research employs a qualitative research approach, drawing upon published studies and official circulars issued by the Governor of the Lebanese Central Bank in response to the currency pegging process. Additionally, this study identifies the roles and responsibilities of central banks within an economy, emphasising the importance of transparency in their assessment approach. The study's findings indicate that the depreciation of the Lebanese currency was not a result of inadvertent economic factors but rather a deliberate course of action. Both the Lebanese deep state and the Governor of the Lebanese Central Bank are found to have played pivotal roles in the devaluation of the Lebanese currency, primarily through the issuance of monetary circulars and other preceding monetary measures. The practical implication of this research lies in its capacity to serve as a significant case study. It highlights the repercussions associated with currency pegging over the global economy and specifically SMEs in a geopolitically unstable and corruption-ridden environment.