Lebanese reserves, stock prices rise following political developments

Saeed Dhahir
For Al-Shorfa.com
2009-07-11

Lebanese supporters of Saad Al-Hariri celebrate in Tripoli on June 8. His victory in the elections has generated optimism in the country’s financial circles. (Reuters)

The Lebanese economy experienced a boost following the election of Saad Al-Hariri as president, efforts to form the government, the successful conduct of parliamentary elections and moves to form the Lebanese parliament, developments that have strengthened the position of financial companies and real estate in Lebanon. Those events have also driven a remarkable resurgence in the exchange rate of the Lebanese pound to the dollar that has allowed the Central Bank of Lebanon to purchase more than $US 170 million.

Financial markets are also benefiting from positive political developments in Lebanon. Deposits in Lebanese banks have increased by $US 15 billion, and the country is now widely regarded as a safe haven from the global financial crisis. According to the Bank of Lebanon, assets held by Lebanese banks through the end of June are valued at approximately $US 23.5 billion.

Chairman of the Bank of Lebanon Riad Salameh stressed that, "The market is optimistic as a result of political trends in the country." He linked recent improvements in economic conditions in Lebanon with internal stability. He opined that Lebanon will probably implement the Paris 3 agreements, which has thus far not been adopted due to political differences. Salameh also predicted that the growth rate will reach six percent by next year.

Meanwhile, the Beirut Stock Exchange rose in recent weeks by $US 3.6 billion, or 17.07 percent.

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