Dollar accounts in Lebanon represented 70 percent of total customer deposits in 2018, Central Bank Gov. Riad Salameh said Wednesday, a slight increase from the previous year.
“Deposits in 2018 increased by 3.5 percent and most of them were in foreign currencies, while deposits in lira remained” at the same levels, Salameh told participants in the Arab Private Sector Forum, which was held in Beirut.
In November 2018, the dollarization in bank deposits had stood at 68.5 percent of total customer deposits, and rose to 70 percent by the end of the year.
At present, total private sector deposits stand at $173.2 billion.
Salameh said a realistic view should be presented of Lebanon that avoids “rumors and artificial desperation,” adding that in 2018, Lebanon saw one or two reports a week that talked of economic collapse and bankruptcy.
“But the fact is that growth in 2018 was between 1 and 1.5 percent, while growth in the region was according to the IMF at 2 percent, and growth in Lebanon could have reached 2 percent if the government had been formed,” he said.
Salameh emphasized that interest rates have risen due to a rise in the budget deficit and an increase in interest rates worldwide. “In general, interest rates in Lebanon rose between 2 and 3 percent,” he said.
Salameh added that banks had made progress on the level of provisions and increased the total credit portfolio by 3.75 percent.
Salameh said that the bank loans to the private sector in Lebanon reached $1.5 billion – almost the same as in 2017.
He added that BDL’s subsidized housing loans stood at $800 million, while $400 million in loans were attributed to the productive sectors last year.
As for objectives for 2019, Salameh said that the priorities were maintaining the Lebanese pound’s exchange rate, maintaining the stability of interest rates and launching an electronic trading platform that will provide transparent pricing, a secondary market and help inject liquidity.
He renewed his support for the digital economy, which he said has a promising future.
Salameh also promised to launch a digital currency for Lebanon before the end of the year, saying this would help strengthen trade movement and activity.
He also underlined the importance of respecting the laws and rules of the countries whose currencies Lebanon deals with.
Salameh added that BDL has announced that money transfer companies must pay funds being received in Lebanon in pounds rather than dollars.
Doing so legally strengthens Lebanon’s ability to combat money laundering, he said, denying claims that the move was designed to beef up foreign currency reserves.
For his part, Prime Minister-designate Saad Hariri, who opened the forum, welcomed Lebanon’s hosting of the important event.
However, he added, “this is an occasion to express my deep regret for the absence of the Libyan delegation from this meeting and to emphasize that the relationship between brothers must remain above any offenses.”
Hariri added that Wednesday’s forum was important as it would discuss the main points of the Arab Economic and Social Development summit, to be held over the weekend.
“We hope that it [the weekend event] will be a successful summit that meets the aspirations of our people in the future, especially since it is the first Arab development summit to be held after the launch of the United Nations Sustainable Development Goals in 2015,” he said.
Hariri called for the removal of trade barriers between Arab states in a bid to stimulate the economies of all countries in the region.
“We [Lebanon] have laws dating back 50 or 60 years, and this is also the case in many Arab countries. It is time to develop them and work together for the benefit of Arab citizens and to provide them with all the facilities they need to work,” Hariri said.
The Daily Star