Lebanon’s Central Bank governor says country is in a ‘dollarized economy’

Lebanon’s Central Bank Governor Riad Salameh said on Monday in a televised news conference that because of the latest developments in the country’s ongoing economic crisis, the country has now entered “exceptional circumstances.”

The economy is now “dollarized,” Salameh said, adding “If there are no dollars in the market, there is no economy.”

The governor confirmed the central bank’s commitment to maintaining the Lebanese pound’s exchange rate peg to the US dollar. He said that the bank’s main goal is the preservation of this peg adding, “we have the capacity for this.”

Salameh said that the central bank has also put measures in place to protect depositors so that they do not bear losses, and that “deposits are secured.”

Capital controls are not on the table, Salameh continued, stating that, “this country lives off of freedom of financial transfers.”

Foreign reserves excluding gold current stand at around $38 billion, including eurobonds, the governor confirmed.

He added that the central bank has asked banks to re-evauluate all credit facilities that have been reduced since October 17, and that banks have been asked to maintain their credit card ceilings.

The governor said that banks will meet to discuss and agree on these issues immediately.

He concluded his address stating that the central bank hopes for a new government as soon as possible.