BDL governor Karim Souaid reveals the fate of deposits and gold

The Banque du Liban (BDL) governor Karim Souaid said he does not expect the country’s financial gap law to be enacted within the next six to eight months, as outstanding comments on the draft continue to prevent Lebanese authorities and the International Monetary Fund (IMF) from reaching a final agreement on its wording.

Speaking to CNN Economic, Souaid said the draft law left the government at the end of 2025 and has since received comments from the Central Bank, as well as “strong comments” from the IMF.

He said work is underway to unify positions and expressed hope that an agreed version would be referred to Parliament by the end of September. However, based on the pace at which laws are passed in Lebanon, he said he did not expect the legislation to be enacted before six to eight months.

On deposits, Souaid said the BDL’s current obligations toward banks and depositors amount to about $79.5 billion and could decline to around $79 billion by the end of the year. Cumulative payments to depositors under Circulars 158 and 166 have reached about $6.1 billion, he said.
 
Souaid also rejected the idea of selling Lebanon’s gold reserves without a clearly defined framework, saying he was generally opposed to such a move. He said the issue should only be considered if the BDL faced an obligation it could not meet and there was an urgent need to make payments to depositors.

“Gold is not allocated to state projects, nor to pay on behalf of the state or banks,” Souaid said.

Regarding the level of foreign reserves that the BDL should not fall below, Souaid said it was impossible to set a fixed “red line” given the ongoing crisis and war.

He said the Central Bank’s reported foreign assets of about $12 billion do not represent funds freely available to the bank, noting that the figure includes mandatory reserves deposited by commercial banks as well as Lebanese government deposits.

Souaid said the Lebanese lira is currently stable, rather than being subject to a fixed exchange rate, and that maintaining this stability depends on demand for the local currency.

He said the Lebanese state collects nearly $6 billion annually in taxes in Lebanese lira, creating demand for the currency and helping maintain monetary stability.

On Lebanon’s inclusion on the European Union’s list of high-risk countries, Souaid said leaving monitoring lists is not solely a political or legal issue but also presents a regulatory challenge.