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Lebanon’s Central Bank (BDL) has announced an increase in its reserves of 430 million dollars, spanning from August 31, 2023, to mid-November 2023.
The Lebanese Central Bank’s foreign currency reserves have improved slightly, with an increase of $430 million since August 31, 2023, totaling $9.003 billion by mid-November 2023. The increase has been positively met in the market, given the context of inflation and a slowdown in economic activity. Nonetheless, it still falls short of the $38.3838 billion in reserves recorded in October 2019.
BDL could potentially achieve better results if the security situation in southern Lebanon and the region does not deteriorate and remains under control. In the event of the opposite scenario, any predictions would be uncertain. Therefore, the Parliament is urged to convene and approve reforms that would reinforce monetary and economic stability.
Intervention from BDL
The increase in BDL reserves is sustained through sporadic and modest acquisitions of US dollars by the Central Bank without disrupting the market. Additionally, the dollarization of airport taxes and certain government fees further contributes to this growth.
According to some sources, this increase is also linked to a fluctuation in the euro exchange rate, which would have allowed the purchase of larger quantities of US dollars on the market, given that some of the reserves are in euros.
Preserving Stability
A part of the funds sustaining the BDL reserves belongs to the government, and another part is owned by the BDL to allow its intervention in the foreign exchange market when needed. Stability is maintained through a balanced relationship between the two parties. All government bonds requested by the Ministry of Finance from the Central Bank in dollars are being met immediately. Additionally, ministries are managing their expenses within the limits of their budgets.
Another crucial and significant factor in the growth of BDL’s reserves stems from the new rule implemented by the first deputy governor, Wassim Mansouri, who has refused to extend loans to the state and consequently refrains from tapping into its reserves.
Revenues in Figures
In a detailed breakdown of the figures, the Treasury revenues have surpassed 180 trillion Lebanese pounds from the beginning of the year until mid-November, with approximately 90 trillion Lebanese pounds in cash. As for the state’s cash revenues, they reached approximately 55 trillion Lebanese pounds, or about 610 million dollars, between August and mid-November. During those three and a half months, the state generated around 55 trillion pounds in non-monetary revenues through checks and bank transfers. Furthermore, the state’s monthly revenues in fresh dollars are estimated to be nearly 25 million dollars (in cash), with the majority stemming from travel or departure fees.
