Foreign currency reserves
back at over $43 billion
Inflows have topped
outflows since December
The Central Bank’s foreign-currency reserves rebounded following the Prime Minister’s withdrawal of his resignation in early December and they are now back at more than $43 billion, said Riad Salameh, Governor of Banque du Liban (BDL), according to an interview with Bloomberg. Foreign reserves dropped to nearly $41.5 billion after the resignation in November.
The recovery showed that confidence is “stronger after the crisis,” Salameh said.
He said that the money outflows witnessed in the aftermath of the resignation have “returned gradually, with inflows exceeding outflows since Dec. 10.” The outflows, amounting to $2 billion in November, contributed to a slowdown in deposit growth to 3.8 percent, according to Salameh.
In another related financial indicator, the staff of International Monetary Fund (IMF) issued a Concluding Statement, following their recent official visit to Lebanon, about the financial situation in the country. The statement said: “In the context of Lebanon’s low growth and rising global interest rates, debt dynamics will deteriorate further and public debt will increase rapidly.” It said that maintaining a policy of fixed exchange rates sustained by high deposit inflows requires substantial fiscal adjustments.
About this issue, Salameh said: “This is the opinion of the staff. It’s not the opinion of the IMF.” The IMF will launch another report after its board meeting in the second quarter of 2018.
According to the IMF staff's statement, the forthcoming parliamentary elections could be an opportunity for upholding macroeconomic stability and implementing structural reforms. It said that the government could rally international support for these goals through the Paris donor conference scheduled for early April.
Reported by Shikrallah Nakhoul
Date Posted: Feb 23, 2018