BDL says foreign reserves rose despite temporary decline

The Banque du Liban (BDL) said its foreign currency assets recorded a net increase over the past year, despite a temporary decline earlier in 2026 that it attributed to geopolitical developments rather than domestic policy failures.

In a statement, the central bank said its foreign reserves rose by about $372 million between April 2025 and April 2026, increasing from $11.06 billion to approximately $11.43 billion. It added that reserves had also grown by around $888 million from April 2020 through the end of January 2026.

The bank acknowledged a temporary drop of $516 million, or about 4.5% of total reserves, during February, March, and April 2026. It said the decline reflected "exceptional geopolitical developments" affecting Lebanon and the wider region, which slowed its foreign currency purchases and market flow.

At the same time, the central bank noted that cash outflows increased at the start of 2026, driven by higher public sector payments and expanded withdrawal ceilings under Circulars 158 and 166, placing short-term pressure on reserves.

The statement added that part of the fluctuation is due to valuation effects linked to global currency movements, particularly shifts in the euro-dollar exchange rate, emphasizing that such accounting factors do not reflect actual cash flows.

BDL said it continues to coordinate with the government and the Finance Ministry to control the Lebanese lira money supply, which it said remains stable and supports long-term exchange rate stability.

The central bank stressed that the main risks to its foreign assets stem from external geopolitical factors beyond its control, including regional security tensions, rather than internal monetary or fiscal policies.

It concluded by affirming its commitment to managing reserves prudently to preserve monetary stability and protect depositors and the broader economy.