Salameh: Banks abiding by U.S. sanctions

Salameh estimated that foreign currency reserves were at a record high.

BEIRUT: Central Bank Governor Riad Salameh said Lebanese banks were complying with all the international sanctions against any state or party labeled by the West as terrorist states or organizations. Speaking to MTV TV, the governor said the Central Bank issued a memo to all banks in Lebanon to respect the sanctions against any country, organization or individual in accordance with the international terrorism list.

Salameh was responding to questions on whether the Lebanese banks would apply sanctions on Hezbollah, which is branded as a terrorist organization by the United States.

Other Lebanese bankers assured The Daily Star earlier that they always update the list of terrorist organizations and individuals that are supplied by the U.S. Treasury Department.

Confidentially, bankers say Hezbollah refrains from depositing any money in Lebanese banks to avoid its seizure by the financial authorities.

Some analysts believe that Hezbollah receives cash from Iran and deposits it in its own financial institutions, which are also blacklisted by the U.S. authorities.

Lebanese banks are also prohibited from doing any kind of business with any exchange dealer or financial institutions blacklisted by Washington.

Salameh said the monetary situation in Lebanon was sound despite the difficult economic and political situation.

He estimated the gross foreign currency reserves at $37 billion, the highest in Lebanon’s history.

Salameh added that the banking sector was witnessing a growth of 7 percent annually.

“There is no risk on the Lebanese pound and the market is reacting normally. The conversion to the U.S. dollar is limited. The assets of the banks are sufficient to convince the market that there are no risks on the pound,” the bank governor said.

Most bankers seem confident that they can achieve acceptable growth in 2013 but fear that the profits in 2014 and 2015 could fall if the GDP growth remained below the 2 percent margin or if the interest rates on deposits shrink further.

But the governor emphasized that Lebanon needed a Cabinet to defuse the tense political and security situation in the country.

Salameh has projected that Lebanon’s GDP would reach 2.5 percent in 2013, depending on the political and economic developments in the country.

A version of this article appeared in the print edition of The Daily Star on June 10, 2013, on page 5.




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