Lebanon's ongoing financial challenges: BDL invests part of foreign reserves in US treasury bonds

Report by Lea Fayad, English adaptation by Yasmine Jaroudi 

Banque du Liban (BDL) has decided to invest $5 billion from its foreign currency reserves in U.S. government treasury bonds, in a move expected to generate annual returns of around $175 million.

The step reflects a common strategy used by central banks worldwide to avoid leaving cash reserves idle, particularly at a time when inflation and rising global prices continue to erode the real value of liquid assets.

Instead of keeping the funds entirely in cash, BDL opted to place part of its reserves in highly secure and easily tradable investments such as U.S. sovereign debt instruments.

Under the plan, BDL will receive annual interest payments estimated at roughly 3.5%, while maintaining the ability to recover the original amount once the bonds mature.

Financial observers consider the move beneficial from an investment standpoint, especially as Lebanon's total foreign reserves are currently estimated at around $11.5 billion.

Still, analysts note that the returns generated by the investment remain modest compared with the scale of Lebanon's broader financial crisis.

While the additional income may strengthen reserve management, it does not address the country's unresolved banking sector collapse or provide a clear solution for depositors still unable to recover their savings.

For many Lebanese, the question remains unchanged: what will ultimately happen to people's deposits?