Lebanon’s central bank announced on Thursday that the country’s liquid assets in foreign currency stood at $8.573 billion, while external liabilities were valued at $1.27 billion, the bank’s first disclosure of these figures.
The country’s net foreign currency assets were $7.303 billion, according to Reuters calculations, based on bank figures.
The bank’s financial engineering drained dollar balances from local banks at high interest rates.
An audit revealed that Banque du Liban “hid $76 billion in losses as a result of this engineering.”
Critics called the policy a “Ponzi scheme” because it relied on re-borrowing to pay off existing debts. Banque du Liban has always said these actions are “legitimate”.
Lebanon has been suffering from an economic crisis since 2019, and the lira’s exchange rate against the dollar has fallen to record lows, weakening the purchasing power of citizens, many of whom have fallen into extreme poverty.
The lira has lost more than 98 percent of its value since the start of the economic downturn in 2019. And last February, the central bank lowered the official exchange rate from 1,500 pounds, which it had held for decades, to 15,000 pounds to the dollar.
At the end of June, the International Monetary Fund warned that the current state of uncertainty in Lebanon poses a “significant risk” to the economic and social stability of the country, which has been battered by multiple crises, non-implementation of needed reforms and continued political paralysis.
“Creator. Award-winning problem solver. Music evangelist. Incurable introvert.”
