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The governor of the Banque du Liban, Riad Salameh, said that the banks are facing a difficult crisis, but that the country is not bankrupt.
This came in a statement issued by the Lebanese Depositors Association after Tuesday’s meeting that included the two parties.
Salameh said, according to the statement, “Lebanon is not a bankrupt country, but the financial sector is suffering the repercussions of the regional crisis from which the country cannot free itself.”
Salameh indicated that banks still control 90 percent of the circulation, “which would prevent the country from suffering higher inflation rates.”
The Delegation of the Depositors Association discussed with Salameh, the implications of the restrictions imposed by the Central Bank and Lebanese banks on withdrawals in Lebanese pounds, which were in addition to previous restrictions on withdrawals in dollars.
And local media reported, last October, that depositors in Lebanon were unable to withdraw their need for local currency cash due to restrictions imposed by banks, after a similar decision was applied to the dollar.
According to the statement, Salameh said that since the beginning of the crisis, the Central Bank has granted bank loans in Lebanese dollars or pounds in order to meet liquidity demands.
He added: “To provide deposits to their clients, banks must strictly apply the circulars of the Central Bank.”
Regarding the use of gold, Salameh highlighted the need to maintain gold reserves to compensate for the country’s lack of natural resources and “to face any inevitable fatal crisis.”
Lebanon has around 286.6 tons of gold, according to data from the World Gold Council.
Lebanon suffers the worst economic crisis since the end of the civil war (1975-1990) and a strong political polarization.
The price of the dollar in the parallel market is 7,000 pounds, compared to 1,515 pounds in the official market, and the average price of 3,200 pounds is the subsidized price of the Banque du Liban.
