BEIRUT: Makram Bou Nassar, deputy director of the Foreign Affairs Department at the Central Bank on Wednesday projected Lebanon’s GDP at 7 percent in 2009 while inflation will set at 3 percent. Nassar made these remarks during a lecture delivered a lecture on “the Role of the Central Bank in Protecting the Lebanese Economy and the Banking Sector from the Global Financial Crisis.”
The lecture was the first in the Lecture Series launched by the Faculty of Business Administration & Economics for the Academic Year 2009-10, aiming at “upgrading the analytical skills and the quality of education of the students and community,” as put by Fadi Asrawi, dean of the faculty.
Bou Nassar began his lecture by giving a positive overview of the recent economic and banking developments in Lebanon.
He said economic growth is expected to reach 7 percent in 2009, while inflation is expected to remain below 3 percent.
The balance of payments recorded a high surplus of $4.8 billion until the end of September 2009, customer deposits are growing by 20 percent annually and are expected to reach $100 billion at the end of 2009, and the central bank’s foreign assets, excluding gold, reached a new historical high of $26 billion.
He also discussed the tradition of conservative and precautionary regulation and prudent supervision by the central bank over the last 15 years that insulated the Lebanese banking system from the effects of the global crisis, explaining that, those include continuous commitment to monetary and banking stability through maintaining exchange-rate stability of the Lebanese pound against the US dollar, thus increasing confidence in the local currency and reducing inflation.
Bou Nassar said other measures taken by the central bank include regulating banks’ dealings with derivatives and structured products, which requires prior approval from the central bank’s Central Council, in addition to forbidding banks from acquiring subprime mortgage debt and high-risk assets that triggers the current global crisis.
The central bank also required banks to maintain high levels of liquidity and a high capital-adequacy ratio, in accordance with Basel II requirements and to abide by international standards on fighting money laundering, good governance, and transparency.
Bou Nassar concluded by discussing the new circulars issued by the central bank in 2009, that aims to decrease the cost of borrowing and reinforcing productive investments through more exemptions on obligatory reserves. – The Daily Star
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