BEIRUT: Central Bank Governor Riad Salameh is expected to post a circular on Banque du Liban’s website Friday setting new ceilings on bank housing loans, sources said Thursday.
“It seems that Salameh may hike the interest rates on bank housing loans by 50 basis points (half a percentage point),” one source told The Daily Star.
It is not clear yet why the governor has decided to hike the interest rate on housing loans.
But sources had their own justification for BDL’s move.
“It is only natural that the interest rates on housing loans rise slightly following the surge on interest rates on Lebanese pound deposits up to 8 percent. Banks need some equilibrium to adjust their balance sheets,” one source said.
The Central Bank has in the past offered commercial banks subsidized housing loans to ease the financial pressure on the borrowers seeking to buy houses.
A source said that the 20-page circular will explain in detail the measures taken by BDL.
Also Thursday, Salameh met President Michel Aoun at Baabda Palace to assure him that Lebanon’s financial situation is generally positive.
During the meeting, Salameh told Aoun that the monetary situation was “positive and continues to support housing loans and productivity,” adding that the current development in the banking sector was “regular.”
In January alone, Salameh said the bank’s assets in foreign currencies had increased by about $1 billion.
The two also discussed talks between officials and Assistant Secretary for Terrorist Financing in the U.S. Department of the Treasury Marshal Billingslea during his two-day visit to Lebanon in late January. The U.S. official met with Aoun, Salameh and other high-level officials, to discuss Lebanon’s efforts to combat money laundering and terrorism funding.
A version of this article appeared in the print edition of The Daily Star on February 02, 2018, on page 4.