Circular 158's impact: Foreign asset decline revealed by BDL

On Thursday, the Banque du Liban (BDL) revealed that its external liquid assets in foreign currencies amounted to $8.54 billion US dollars. This indicates a decline between July and mid-August 2023.

The decrease in liquid assets was attributed to the depreciation of the Euro against the US dollar during the same period and the payment of accrued interest on Arab deposits, along with the costs of Circular 158.

This article is originally published in, translated from Lebanese newspaper Nidaa al-Watan.

According to the Bloomberg platform, the statement also highlighted that the market value of the "Eurobonds" portfolio in the bank's possession increased from $387 million to $421.8 million US dollars during this period.

In contrast, external liabilities in dollars amounted to $1.3 billion, resulting in a net amount (assets minus liabilities) of $7.2 billion. This is a notable decrease from the over $9 billion mentioned by Riad Salameh before his departure.

For the second time since this regular disclosure began after Riad Salameh departed from governance, the value of the banks' certificates of deposit at the central bank, estimated to be over $86 billion, is not appearing. The banks claim that this substantial amount belongs to depositors and is being utilized by the BDL.

Salameh responded to the banks' association last year, affirming that these certificates are denominated in Lebanese lira and repeatedly indicating that the BDL has reimbursed the banks with those billions and more.

Therefore, the BDL is not concerned with dollar deposits.

Consequently, depositors' associations question whether the acting BDL governor, Wassim Mansouri, will adopt a similar theory to Salameh's regarding bank deposit certificates, which fundamentally represent people's deposits.

Mansouri reiterated his commitment in Thursday's statement "not to touch the external reserves of the central bank except to settle obligations due to the BDL (refer to the table) and to pay the required amounts as per Circular 158."

Sources within depositors' associations emphasized that "the reference to Circular 158 is a minor and timid acknowledgment of the bank's deposits." In his recent press conference, Mansouri stated that he "has no answer to the question of deposits in general!"