BDL sign. (Credit: João Sousa)
The Banque du Liban (BDL) is currently without a monetary policy, in the classical sense of the term, as the ongoing banking and financial crisis has deprived it of its main tool: The interest rate. Without this instrument, it cannot act effectively in the face of the shifts, nor pursue any traditional longer-term objectives, such as economic stability, sustainable growth and inflation control.This crisis has turned banks into “zombie” institutions, unable to restore confidence in deposits or grant loans. So what tools are still available to BDL? Not many, but the central bank claimed to have achieved “successes.” They include stabilizing the exchange rate, increasing foreign reserves and stopping financing the government, although these assertions are partially disputable. First of all, BDL stopped financing the government, claiming...
The Banque du Liban (BDL) is currently without a monetary policy, in the classical sense of the term, as the ongoing banking and financial crisis has deprived it of its main tool: The interest rate. Without this instrument, it cannot act effectively in the face of the shifts, nor pursue any traditional longer-term objectives, such as economic stability, sustainable growth and inflation control.This crisis has turned banks into “zombie” institutions, unable to restore confidence in deposits or grant loans. So what tools are still available to BDL? Not many, but the central bank claimed to have achieved “successes.” They include stabilizing the exchange rate, increasing foreign reserves and stopping financing the government, although these assertions are partially disputable. First of all, BDL stopped financing the government,...
Israel continues attacks on southern Lebanon, demolishes buildings in Bint Jbeil