Lebanon’s FX reserves drop 2% m/m to USD 35.2bn at end-Mar 2013

By bne IntelliNews April 4, 2013

Lebanon's foreign-currency reserves fell 2% m/m to LBP 53.3tn (USD 35.2bn) as of end-March 2013 due mainly to exchange rate fluctuations which prompted the central bank to intervene on the money market, central bank data showed on April 4. In annual terms, FX reserves grew 9% y/y in March, following an 11% rise in the previous month.

In mid-March, political and security instability boosted demand for US dollars mainly from small bank depositors who feared for their savings. But central bank governor Riyadh Salameh has repeatedly assured that the Lebanese pound is strong and stable. The central bank also boasts record gold assets and ample liquidity. These factors continue to support Lebanon's external position and sovereign ratings despite political instability and sporadic security tensions. The central bank's gold asset value totalled LBP 22.25tn at end-March slightly up from LBP 22.12 the month before. The bank calculates its gold assets at current market prices. The price of once ounce of gold was USD 1,548 on April 4.

The central bank's securities portfolio rose to LBP 17.8tn from LBP 17.08tn at end-February as the central bank bought unsubscribed T-bills. Central bank loans to the public sector stood at LBP 43.63bn, while the value of loans to the financial sector stagnated in monthly terms at LBP 2.43tn. Lending and economic activity remains strong though despite seasonal fluctuations. Total assets consequently increased to LBP 117.59tn at end-March from LBP 116.46tn the month before.

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