Lebanon's Central Bank Gov. Riad Salameh said in statements on Thursday that the economy is suffering from major problems with the complete absence of any solutions.
His remark came during the monthly meeting between Salameh and the delegation from the Association of Banks.
“The economic plan is not put into practice and there is no clarity on how to deal with the consequences of stopping payment (Default), which left a great shock to the economy and the financial sector," Salameh said.
"The negotiations with the International Monetary Fund are still pending. If this situation continues, there will be no return to growth and economic revitalization,” he added.
The governor reiterated that BDL can no longer exhaust the remaining foreign currency reserves to subsidize fuel oil, wheat and pharmaceutical in a few months.
“I informed the government not to use BDL’s compulsory reserve in foreign currencies for the purpose of subsidies. We can continue supporting fuel, wheat and medicine for another two or three months at an exchange rate of LL1,500 against the dollar.”
He added that subsidizing food stuff at a rate of LL3,900 will also end in two or three months.
According to Salameh, the public Treasury is suffering as well as the economy due to the high budget deficit.
However, the governor said that the BDL and the Banking Control Commission will take all the procedures legally available to reactivate the sector’s contribution to financing the economy.
“Capitalization and liquidity are essential for financing the economy and the sustainability of the sector is linked to its ability to renew itself,” he noted.
In response to a question about the decline in the external assets of the Banque du Liban between Sept. 15 and 30, by $2.2 billion, the governor explained that this is mainly due to the repayment of BDL loans in dollars by banks.
