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Regarding the monetary and banking conditions, Salameh saw during the monthly meeting held yesterday between the Bank of Lebanon, the Supervisory Committee and the Association of Banks that the economy suffers from great problems with the total absence of treatments. The economic plan is not implemented and there is no clarity on how to deal with the consequences of stopping payment. (Default), which left a great impact on the economy and the financial sector. Negotiations with the International Monetary Fund are still pending. If this situation continues, there will be no return to growth or economic revitalization.
He also saw that the public treasury suffers like the economy, and that the Banque du Liban, at the request of the Ministry of Finance and based on article 91 of the Credit and Currency Law, finances in liras, on the one hand, the continued treasury deficit, and on the other hand, to subscribe to Treasuries that mature in the absence of a subscription from any other party.
He informed the association that he informed the government not to violate its mandatory reserve in foreign currency for support purposes, thus allowing practical support for two or three months for basic materials, specifically fuel, wheat and medicines, at an exchange rate of 1,500 Lebanese pounds. To the dollar and food at an exchange rate of 3,900 Lebanese pounds. For the dollar.
He expected the government to implement the card proposal to protect the purchasing power of those most vulnerable to living conditions.
Regarding the reasons for circular 154, Salameh highlighted the need for banks to adhere to the content of circular 154, which aimed, on the one hand, to restore external liquidity. In addition, the commitment to retransfer rates (15% for clients and 30% for PEPs) in turn contributes to strengthening liquidity and the objective of Circular 154 for its part is to recapitalize the sector, which may exceed 20%. Banks can sell Perpetual Bonds or shares to depositors, provided that they are carried out after an evaluation process by reliable bodies.
The governor considered that the acute crisis has been left behind, and that the Banque du Liban and the Vigilance Committee will take all legally available measures to reactivate the sector’s contribution to financing the economy. Capitalization and liquidity are essential to finance the economy and the sustainability of the sector is linked to its ability to renew itself.
Regarding the student dollar, Salameh said that the Banque du Liban had issued a circular on the matter, which must be complied with. The association considered that it was affirmed in the reasons that need the law approved by the Parliament that the Banque du Liban will support dollars of the students, as well as wheat and medicines. He also saw the need to create a central mechanism so that the law was not abused by resorting to more than one bank by those involved. It was agreed to wait for the practical circular to clarify all these aspects, which is supposed to be issued by the Ministry of Finance.
Salameh wished and the association agreed to initiate a dialogue with the representatives of the depositors, with the participation of the Banking Control Commission.
In response to a question about the decline in external assets of the Banque du Liban between September 15 and 30 by $ 2.2 billion, the governor explained that this is mainly due to the repayment of BDL loans in dollars by the banks.
