Lebanese Bank Governor Reassures over Pound's Stability

Published May 9th, 2000 - 02:00 GMT

Lebanon will continue its policy of monetary stability despite the pressures the Lebanese pound has come under as a result of Israel's pledge to withdraw its troops from the south, Central Bank governor Riad Salameh said Monday. 

"At the moment what we are seeing are one-off reactions connected to the issue of the Israeli withdrawal. There has not been a reversal of the trend, and the proof is that we have kept the rediscount rate of Lebanese Treasury bonds in Lebanese pounds at 20 percent, and do not intend to increase it," he told AFP. 

He said the Central Bank was in control of the situation, and was intervening to make up the difference between demand, which had increased, and supply, which had not disappeared. 

Salameh did not reveal how many dollars the bank had sold since mid-April when the pound first came under pressure. 

The bank's balance sheet shows that its foreign currency assets have fallen from 7.5 billion dollars in mid-April to 7.17 billion dollars at present, but Salameh denied that the drop reflected the amount spent by the bank in shoring up the pound. 

Bank sources say that in the past three weeks the Central Bank has sold nearly 200 million dollars of its net reserves, which stand at about five billion, to satisfy the demand for dollars - (AFP) 

 

© 2000 Al Bawaba (www.albawaba.com)

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