LEBANON-CENBANK/INTERVIEW Lebanon to issue bond for up to US1.5 bln dollars this year - central bank gov
Record ID:
144791
LEBANON-CENBANK/INTERVIEW Lebanon to issue bond for up to US1.5 bln dollars this year - central bank gov
- Title: LEBANON-CENBANK/INTERVIEW Lebanon to issue bond for up to US1.5 bln dollars this year - central bank gov
- Date: 7th August 2015
- Summary: (SOUNDBITE) (English) LEBANESE CENTRAL BANK GOVERNOR RIAD SALAMEH, SAYING: "The tendency is to have another stimulus package for 2016 and we are in a need to stimulate credit because the growth in credit this year is low, it is growing at a ratio between three and four percent on an annualised basis while the ... in fact the deposits are growing at a rate of six to seven p
- Embargoed: 22nd August 2015 13:00
- Keywords:
- Location: Lebanon
- Country: Lebanon
- Topics: General
- Reuters ID: LVA2T21OBYM3CSIH7NTDHLO2BT63
- Aspect Ratio: 16:9
- Story Text: Lebanon is planning to issue a new U.S. dollar-denominated bond this year to raise up to US1.5 billion dollars, the central bank governor said on Friday (August 7), welcoming a move which would avoid the government using foreign reserves to repay debt.
Governor Riad Salameh said he also expected Lebanon would issue a new economic stimulus package in 2016 worth around U.S.1 billion dollars because the political and security situation in the region is hampering Lebanon's ability to generate growth.
"They can issue up to one point five billion (US dollars) if they want to use all the legal limits that they have ... This is within the already voted laws," he Salameh said in an interview with Reuters.
Lebanon issued its largest ever U.S. dollar-denominated Eurobond in February, raising U.S. 2.2 billion dollars.
"The tendency is to have another stimulus package for 2016 and we are in a need to stimulate credit because the growth in credit this year is low, it is growing at a ratio between three and four percent on an annualised basis while the ... in fact the deposits are growing at a rate of six to seven percent this year. There is excess liquidity and we need to channel this liquidity into the economy," added the 65-year-old Salameh, who has run the central bank for more than two decades. His current mandate expires in 2017 but he said it was too early to discuss whether he would run for another term.
The central bank is widely seen as one of the most dependable institutions in the Mediterranean country, where political divisions have brought government policymaking virtually to a halt.
The central bank has stepped in to promote initiatives usually put forward by governments, such as stimulus packages, which it has issued for the past three years.
The war in Syria has hurt Lebanon's exports, Salameh said, while conflict in the wider region as well as lower oil prices had driven down demand for consumption and investment.
"As long as the monetary stability is not threatened, the central bank will keep innovating and creating opportunities for credit and investment locally," he said, adding that the value of the Lebanese pound against the dollar was a good reflection of market confidence.
The turmoil in Syria has hit its smaller neighbour Lebanon especially hard. The violence since 2011 has driven more than one million refugees into the country of only 4.5 million, increasing the burden on its already shaky infrastructure.
Lebanon is likely to compile a stimulus package worth U.S. 1 billion dollars in 2016, but this could be increased if needed, Salameh said.
Salameh said internal factors had also affected the economy, which he said would record zero to two percent growth this year. Lebanon's GDP growth was around two percent in 2014 according to an International Monetary Fund report in June which predicted a similar level this year.
A lack of political consensus has left Lebanon without a president for more than a year.
Politicians divided by local and regional conflicts have even struggled to agree on where to dump trash, leaving mounds piling up on the streets. An overloaded power system has led to even more frequent power cuts in the sweltering summer heat. - Copyright Holder: REUTERS
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