Beirut - Lebanon‘s central bank, the Bank of Lebanon (BdL), saw public sector deposits rise by $7.84 billion in mid-August, reaching $7.86 billion by month’s end – representing an accumulation of $16.62 million in unused public revenues. this increase coincides with a decrease in Lebanese pound liquidity, falling from 74.4 trillion LBP to 72.86 trillion LBP, a drop of 1.55 trillion LBP.
The reduction in lira circulation, now equivalent to roughly $814 million USD at the prevailing market exchange rate, is enabling BdL to maintain control over the local currency exchange rate. The accumulation of unused public funds is reportedly a deliberate policy agreed upon between the bdl and the Ministry of Finance,allowing the central bank to absorb Lebanese pounds from the market and utilize them to purchase US dollars,bolstering its reserves.
Despite these shifts, the Lebanese budget remains substantially burdened by substantial losses, hindering the BdL’s ability to function effectively as a cornerstone of the financial sector. A forthcoming Financial Organization Law, currently under government discussion, is intended to establish mechanisms for addressing these losses and restoring solvency and liquidity to both the BdL and the broader banking sector.
