A dramatic drop in the “reserves” of the Central Bank!

Leah Al-Qazzi wrote in Al-Akhbar: The Central Bank of Lebanon says that it no longer has sufficient dollars to finance the import of petroleum products, medicine, wheat and foodstuffs. This is supposed to lead him to reduce expenses and “rationalize” the use of what he has left. But the bank preferred to “float” a number of banks that suffer from deficits in their foreign accounts, and sold them dollars to pay off their obligations. This is one of the gates of wasting dollars at the Central Bank, which decreased, “dramatically”, by 2.2 billion dollars within two weeks.

The only proven fact: BDL’s foreign currency assets are collapsing. A huge decline in these assets (the bank calls them reserves) this year, of which 2.2 billion dollars were recorded exclusively between September 15 and September 30. The total value of losses since the start of the year is estimated at $ 11.3 billion in the first nine months of 2020. It is the year of the collapse of the “Temple”, the dissolution of its foundations launched years ago. It is not assumed that there will be discussion about the occurrence of the “catastrophe”, as the source of the figures is the budget of the Central Bank. But under this “solar”, there are many “stories” of how money is spent in foreign currencies. He who emits “camouflage smoke” is only the “central” himself. This was evident in the statement issued yesterday by the monthly meeting between Governor Riad Salameh, members of the Banking Control Commission and members of the Banking Association.

After Salame’s assurances that the severe crisis “is behind us,” the participants asked about the decline in the external assets of the Banque du Liban between 15 and 30 September. Salameh’s answer, according to what was quoted in the circular: “This is mainly due to the payment of the BDL’s loans in dollars by banks.” The simple Arab interpretation of the sentence is that the Central Bank had loaned the banks dollars, which the latter had deliberately returned. Since the “external assets” of the Central Bank include: deposits with correspondent banks, deposits with the International Monetary Fund, such as state obligations, and loans that it owes to banks operating in Lebanon in foreign currencies, does this not assume that if the debt is paid, the assets will increase in foreign currencies and not decrease? This leads to two conclusions: Either the information on the record clerk was confused – the circular, and he did not transmit the minutes of the meeting honestly, or that the governor of the Central Bank is trying to mislead, and he does not want to reveal the true reasons for the depletion of hard currency since the beginning of the year, and it has intensified in the last two weeks, because if he does, he will strengthen the fire Flaming beneath it.

One of the participants in the meeting told Al-Akhbar that at the end of the meeting, Salameh was asked about the losses in foreign currency assets. what does that mean? Salameh sold the banks dollars in order to pay off their obligations abroad. Where did Salama come from in the US dollar? From the account called “Total Reserves”, which contains about $ 19.5 billion (based on figures that Salameh is pleased with political officials, without showing any evidence of them). This number is all that the Central Bank has of foreign currency assets, made up of what remains of the people’s deposits that banks have deposited with it.

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