The benefits outweigh the draw
In contrast to this decrease in the value of the reserves, the same BDL figures indicate that the volume of dollars sold through the foreign exchange trading platform, which is managed by the Banque du Liban, exceeded the limits of $5.17 billion. Thus, it turns out that the size of the decrease in reserves, which was driven by the process of pumping the dollar through the platform, is equivalent to about 35 percent of the value of the total operations of the platform. In other words, since the beginning of the year, the Banque du Liban has secured about a third of the dollars sold through the platform from its reserves, while it secured the other two-thirds from other sources, such as buying them from the black market or money transfer centers (OMT).
At the same time, the budgets showed that the Central Bank’s obligations towards commercial banks, arising from bank deposits with it, increased by 2.93 percent until the month of May, despite the withdrawals that banks make from the Banque du Liban for the benefit of their customers (in Lebanese pounds or dollars, according to the approved circulars). . Thus, it becomes clear that the mass of interests accumulating on the Banque du Liban, as a result of the deposit certificates written by its banks, has become greater than the withdrawals that take place according to specific ceilings. In any case, and because of the continued accumulation of these obligations, as a result of interest, it is expected that the mass of the Central Bank’s losses will continue to rise regardless of the withdrawal amounts that banks secure to their customers (noting that these losses are represented in the difference between the assets and liabilities of the Central Bank in foreign currencies). In all cases, it is known that there are other sources of the continuous increase in these losses, such as the liquidity that the Central Bank loses from its reserves to intervene through the platform.
High mass losses
The rapid rise in the mass of losses, automatically leads us to search for the item of other assets in the Central Bank’s balance sheet, which specifically represents the cumulative losses incurred in the assets, which the Central Bank did not recognize, but rather deliberately concealed by keeping them recorded as fictitious assets. This particular item, its value increased by 34.25 percent (ie more than a third) until May 2022, until it alone represented about 41 percent of the total assets recorded in the budgets.
It is worth noting that the value of the item of other assets exceeded the $69 billion limit, which by a limited margin exceeds the size of the total central bank losses estimated by the government in the financial recovery plan.
Finally, the Central Bank’s budget recorded a slight decrease of 2.8 percent in the value of gold owned by the Banque du Liban, as a result of changes in gold prices globally. As a result, the value of the gold stock at the Banque du Liban is close to 17.08 billion dollars, which is equivalent to about 10.04 percent of the value of the total budget. Noting that the value of gold in particular witnessed slight increases during the past two weeks, which began to compensate for previous declines in its value.