BEIRUT: Central Bank Governor Riad Salameh said Monday that BDL was preparing plans to launch digital currency in 2021, adding that around $10 billion in cash were kept in Lebanese households.
As for the money supply in the Lebanese market, it is estimated that there are $10 billion stored inside homes, which requires setting up a new regulatory mechanism to restore confidence in banks, including preparing a Lebanese digital currency project, during the year 2021, that will help implement the cashless system, which allows moving the money market, locally and abroad, Salameh told the Lebanese Depositors Association.
The meeting touched on the causes of the crises facing Lebanon, the adopted monetary policy, the means of treating the financial and economic system, and the conditions for it to be remedied by implementing fundamental political reforms.
The governor stressed, according to the statement, that "despite the shortcomings and stagnation caused by the coronavirus and the lack of respect by the state in paying Lebanon's external obligations (Eurobonds), which directly affected the flow of foreign capital and hard currencies, the Central Bank has carried out its duties in a practical and professional way.
"Lebanon is not a bankrupt country, but the financial sector suffers from the repercussions of the regional crisis that Lebanon is unable to free itself from, in addition to targeting the banking sector for a period of three years with organized smear campaigns, as well as the general losses as a result of the accumulation of the current account deficit and the budget deficit, the governor explained.
He pointed to "the difference in the rate of the dollar between the platform price and the official exchange rate, adding that it was impossible to deny the development of the monetary economy,
He assured that banks still control 90 percent of the circulated cash in the Lebanese market, which spares the country from further high inflation rates.
Regarding withholding bank deposits, the Central Bank, since the beginning of the crisis, granted banks loans in dollars or Lebanese pounds to enable them to meet liquidity demands. "
"To provide deposits to their customers, banks must strictly implement the circulars of the Central Bank. It is time for banks and shareholders to assume their responsibilities by reconfiguring their obligations, increasing their capital by 20 percent, returning the transferred funds by 15 to 30 percent, and recapitalizing 3 percent in their accounts with correspondent banks, Salameh explained.
He added that as for those who fail to meet these conditions, BDL will be obliged to acquire the lenders.
Salameh said BDL had drawn up laws and circulars to be strictly implemented.
The governor disclosed that BDL was in the process of setting up a mechanism to guarantee the purchasing power of depositors who hold deposits in lira, which has decreased in number to about 18 percent of the total deposits in banks.
With regard to the use of gold, the governor stressed that "Lebanon does not have any natural resources, and we must keep gold because it is one of the assets that can be liquidated in foreign markets if we are faced with an inevitable fateful crisis."
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