Two-month deadline: IMF signals Lebanon's gold reserves could help depositors

Report by Lea Fayad, English adaptation by Yasmine Jaroudi 

The International Monetary Fund (IMF) has indicated that Lebanon's central bank gold reserves could potentially be used as a solution to repay depositors, marking the first time the issue has been raised in the fund's discussions with Lebanese officials.

According to sources familiar with the talks, the IMF was quoted as saying that using the gold "may be a solution," in what sources described as a new level of flexibility on one of Lebanon's most sensitive financial files.

However, the fund did not provide details on how the gold could be used—whether through sale, pledge, leasing, or other mechanisms—and noted that any decision remains with the Lebanese state. 

Lebanon currently has a law that prevents the disposal of the central bank's gold reserves in any form.

Sources also said the IMF showed more openness toward the government's plan to repay a maximum of $100,000 in cash to each depositor, based on the total value of a depositor's accounts across the banking sector rather than per bank.

Under that approach, a depositor with $300,000 spread across three banks would receive $100,000, not $300,000. The IMF had previously pushed for a per-bank calculation, which would have allowed depositors to recover larger amounts.

Despite the flexibility, the fund remains firm on a key point: rejecting any additional financial burdens on the Lebanese state. The IMF is insisting on a clear solution to the unresolved debt relationship between the government and the Banque du Liban (BDL).

As part of that process, the IMF has called for a full reassessment of BDL's assets and liabilities, including its gold holdings. 

The fund has requested that the gold be valued on the central bank's books at an average price from the previous year rather than the current market price, to stabilize figures and align with international standards.

The IMF also requested an evaluation of the banking sector, followed by efforts to identify illicit funds linked to corruption and financial misconduct, including profits derived from excessive interest rates and the settlement of debts at the former official exchange rate of LBP 1,500 to $1.

The delegation has reportedly given Lebanon a two-month deadline to address these points, a step that would pave the way for a preliminary agreement with the IMF before it is submitted for approval by the fund's executive board, expected between May and June.