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The meeting discussed “the causes of the crises facing Lebanon, the monetary policy followed and the means to address the financial and economic system, which are conditioned to the implementation of fundamental political reforms in parallel.”
The governor stressed, according to the statement, that “despite the deficiencies and stagnation caused by the” Corona “virus and the failure of the State to comply with Lebanon’s external obligations (Eurobonds), which directly affected the flow of foreign capital and hard currencies, the Central Bank has shown that it has done its job in a professional manner. “
He added: Lebanon is not a bankrupt country, but the financial sector suffers the repercussions of the regional crisis from which Lebanon is unable to free itself, in addition to targeting it for a period of 3 years with organized smear campaigns that used a tool to pressure regional divisions, as well as general losses as a consequence of the accumulation of the current account deficit and the budget deficit during the five years. The past, which was reflected in the national exchange rate.
He pointed out “the difference in the price of the dollar between the price of the platform and the official exchange rate”, and said that “it is impossible to deny the development of the monetary economy”, and pointed out that “the banks still control 90 percent of circulation, which also prevents the country from higher inflation rates. ” Regarding the retention of bank deposits, the Central Bank, since the beginning of the crisis, granted loans to banks in Lebanese dollars or pounds so that they could meet liquidity demands.
He continued: To provide deposits to their customers, banks must strictly implement the Central Bank circulars. It is time for banks and shareholders to assume their responsibilities by reconfiguring their obligations, increasing their capital by 20% and returning the transferred funds by 15 to 30%, and reconstituting 3% in their accounts with correspondent banks. Those that fail will be acquired by the Central Bank. The Central Bank has prepared laws and circulars of strict compliance and no listing.
He explained that “in the process of establishing a mechanism to guarantee the purchasing power of depositors who have deposits in lira, which has decreased in number to about 18% of total deposits in banks, for which the Central Bank provided and it has yet to do so for the banks which, in turn, have transferred a large amount of deposits in pounds to dollars. “
He said: Regarding the money supply in the Lebanese market, there is an estimated 10 billion dollars stored inside houses, which requires the creation of a new regulatory mechanism to restore confidence in banks, including the preparation of a Lebanese digital currency project, during the year 2021, that will help implement the “CASHLESS SYSTEM”. This allows the money market to move locally and abroad. “
Regarding the use of gold, the governor stressed that “Lebanon does not have natural resources and we must conserve gold as it is one of the assets that can be liquidated in foreign markets if we face an inevitable fatal crisis.”
He concluded by asking the members of the association to “periodically follow up with the Central Bank to correctly apply the bank circulars.”
The Depositors Association proposed a timely study “to reduce losses of those who deposited and documented the national currency” and is studying it with the Central Bank “with a view to implementing it and implementing it through the issuance of circulars that help accelerate the solution of the crisis “.
