Central Bank reserves stand at $39 billion
More stability of the monetary policy and currency, and more confidence in the banking sector
The Central Bank (BDL) reserves in foreign currencies reached $38.8 billion at the end of the first half of 2015, up by around 15 percent from the same period last year, according to figures published by BDL. These reserves exceeded $39 billion in mid July.
“These high reserves are strengthening the balance sheet of the BDL in a way as to make it better able to intervene in the foreign exchange market and guarantee more stability of the lira and interest rates,” said Muhammad Baasiri, third Vice-Governor of the BDL. “They are also providing immunity to the monetary system and the banking sector, since high liquidity ensures that the BDL is able to face any eventual crisis,” he said.
“Higher reserves ensure more confidence in the banking sector and help attract more deposits,” said Joe Sarrouh, Executive Advisor to the Chairman at Fransabank.
Current reserves represent 71.6 percent of the overall public debt, 83.8 percent of the net public debt, and cover 161 months of the service debt, according to BDL.
“This is a positive fact as most of the country’s debt is local,” said Sarrouh. “It’s rare to find such a case worldwide, as the State is able to finance itself through local sources without counting on external creditors,” he said.
BDL has been stimulating internal demand and pushing economic growth and job creation sustainability by supporting subsidized loans to the productive sectors. The latest initiatives in this context were translated by the stimulus packages of 2013/2014, which proved to be successful, contributing to around 50 percent of real Gross Domestic Product (GDP) growth, according to BDL estimates. In 2015, BDL announced a third $1 billion stimulus package, coupled with the funds revolved from 2014.
Reported by Leila Rahbani
Date Posted: Jul 22, 2015