Cooperation between the Central bank and the government has secured revenues of more than 20 trillion Lebanese pounds in August, which increased to around 25 trillion in September, according to acting Banque du Liban governor Wissam Mansouri, who pointed out to “the increase in foreign reserves in the country.”
However, Mansouri warned in an interview with Asharq TV on the sidelines of the IMF meetings in Marrakesh that the country would reach a stage “in the coming months or beyond where a deficit will emerge, resulting in the suspension of some services.”
He refused to specify the nature of these services, noting that it is “the government that shall determine these.”
Last August, the Central Bank decided to pay public sector salaries in US dollars at an exchange rate of approximately 85,500 Lebanese pounds per dollar. Mansouri stated that “the 2023 state budget entails a deficit of 46 trillion Lebanese pounds, exceeding 24% of the gross domestic product.”
While he noted that foreign currency reserves in Lebanon “are currently increasing,” he fell short of specifying the exact amount of the increase. He emphasized that these reserves “will not be touched,” urging the government to rely on “its internal revenues.”
Regarding the internal situation, Mansouri considered it “stable, if we put the issue of banks aside.” He reiterated the call for reforming the banking system, stating that economic reform hinges on addressing this sector.
Asked about the reforms related to the IMF program, Mansouri said that the mechanism of political decision-making in Lebanon is “complicated.” He acknowledged that the situation in the country is “more difficult due to the absence of a president and the caretaker status of the government,” so “it is difficult to say there is progress in this regard.”
Mansouri affirmed that the decision not to finance the state in Lebanese pounds or dollars is “irreversible,” considering it a “reformist” decision. He stated that neither the government nor the Ministry of Finance can oppose it and that there is close cooperation today between the Central Bank, the government and the Ministry of Finance to ensure the success of this approach.
