Lebanon has devalued its official exchange rate for the first time in 25 years, weakening it by 90 percent but still leaving the local currency well below its market value.

The central bank confirmed the new official rate of 15,000 pounds per United States dollar on Wednesday, scrapping the rate of just more than 1,500 pounds at which the currency was pegged for decades before the currency collapsed.

The pound has crashed in the past few years, with many Lebanese pointing to mismanagement by the country’s ruling elite and decades of corruption that led to a financial meltdown in 2019.

Lebanese officials have described the adoption of the new official exchange rate as a step towards unifying an array of rates that have emerged during the crisis.

But market participants said the pound was changing hands at about 60,000 per dollar on Wednesday on the parallel market, where most trades take place.

Since the economic downturn, Lebanon’s cash-strapped banks imposed informal limits on cash withdrawals in dollars, with most depositors losing access to their savings.

The new rate will be applied to limited withdrawals in local currency from US dollar accounts. It is also due to be applied to customs duties in a country that depends heavily on imports.

Withdrawals in Lebanese pounds from hard currency accounts at the new official rate will still suffer a de facto haircut of 75 percent based on Wednesday’s market rate.

Unifying multiple exchange rates is one of several steps sought by the International Monetary Fund for Lebanon to clinch a $3bn aid package that would help it to emerge from the meltdown.

But the IMF said last year that progress in implementing reforms remained “very slow”, with the bulk yet to be carried out despite the gravity of a crisis marking Lebanon’s most destabilising phase since the 1975-90 civil war.

That peg to the dollar was implemented in 1997 to encourage investor confidence and to stall hyperinflation after its 15-year conflict.

Lebanon’s Central Bank and Finance Ministry first announced the decision to officially devalue the pound last September.