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Salameh projects up to 2 pct GDP growth

Central Bank Governor Riad Salameh during a press conference at the bank's headquarters, Wednesday, June 18, 2014. (The Daily Star/Mohammad Azakir)

BEIRUT: Central Bank governor Riad Salameh projected the gross domestic product growth in Lebanon in 2014 to range between 1.5 percent and 2 percent, while inflation will not exceed 4 percent despite the fallout from the Syrian crisis.Speaking during Lebanon’s Financial Market Association Golden Jubilee Grand Celebration, the governor said part of this rise is due to the continuation of the confidence factor, which is the fundamental element in the preservation of stability and growth.

“The monetary situation in Lebanon is stable and we did not witness in our markets any conversion from the Lebanese pound to the U.S. dollar. This fact is like a criteria of confidence in the Lebanese economy,” Salameh argued.

The governor also commented about the interest rates. “Interest rates remained stable. As for the Eurobonds in the secondary markets, we have seen a drop in the return on the Lebanese bonds. We are also applying interest rates that are even better than the actual sovereign rating of Lebanon. Lebanon is classified as B- while the interest rates we are applying is based on BB and even BBB classification,” Salameh said.

He added that there are positive signs on the growth of customer deposits. “Until this day, the annual growth of deposits has reached 6 percent and this growth is crucial because we have projected that the deposits in 2014 will reach $140 billon,” Salameh said.

The governor also focused on the impact of the banks housing loans on the economy in general.

He noted that the balance of payments achieved a surplus this year.

“The Central Bank’s foreign currency reserves is at an all-time high and has exceeded $38 billion, and this does not even include the gold reserves,” Salameh explained.

He renewed the Central Bank’s commitment to combat money laundering and respect all international banking requirements.

Salameh stressed that consumer loans or personal loans did not reach critical proportions.

“We issued a memo to all banks to abide by a certain ceiling in consumer loans. Up until now, the personal and consumer loans represent 50 percent of the income of the Lebanese family and this average is sufficient and the payments of these loans are settled in a normal manner,” he added.

 
A version of this article appeared in the print edition of The Daily Star on September 03, 2014, on page 5.

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Summary

Central Bank governor Riad Salameh projected the gross domestic product growth in Lebanon in 2014 to range between 1.5 percent and 2 percent, while inflation will not exceed 4 percent despite the fallout from the Syrian crisis.Speaking during Lebanon's Financial Market Association Golden Jubilee Grand Celebration, the governor said part of this rise is due to the continuation of the confidence factor, which is the fundamental element in the preservation of stability and growth.

The governor also commented about the interest rates.

Salameh stressed that consumer loans or personal loans did not reach critical proportions.


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