Pressure on LP eased as Hariri enters office
Rafik Hariri’s taking up, once again, the reigns of the Lebanese government appears to be having it first positive economic effects. According to Riad Salameh, the governor of the country’s central bank, pressure on the Lebanese pound eased over the past week and this trend is expected to continue.
Speaking at a three-day conference organized by the Union of the Arab Banks, Salameh said that the central bank had not found it necessary to intervene on the interbank market during the first week of Hariri’s second term in office.
The central bank allows the pound to fluctuate within a 1,501-1,514 Lebanese pounds to the dollar band, and over the past year has used a good portion of its foreign-exchange reserves to defend the local currency. Salameh did not say how much was spent so far this year, but the figure is believed to be in excess of $600 million.
The Central Bank does not release figures for its net foreign-exchange reserves, with which it intervenes in the currency markets. Gross foreign-currency reserves, including the deposits of commercial banks with the central bank, dropped to $6.3 billion in mid-October from $7.6 billion at the end of 1999, reported the Daily Star.
During his address, Salameh ruled out any imminent drop in the interest rate on the Lebanese pound. Before that could take place, he said, it would be necessary to see how the government implements its economic and financial program. – (Albawaba-MEBG)