The Central Bank adopts a new official exchange rate of 15,000 LBP for one USD. Gas Offshore: Qatar Energy becomes the 3rd partner of the consortium and increase in the current account deficit in the 1st half of 2022.
The Bank of Lebanon adopted on February 1 an official exchange rate of 15,000 LBP/1 USD, thus abandoning the rate of 1,507.5 LBP/1 USD in force for 25 years.
This change should have an impact on the Lebanese banks, which will have to adapt the accounting and the valuation of their balance sheets to the new rate, while having a transition period of 5 years to adjust their balance sheet and compensate for the losses linked to the deterioration in the value of some of their assets.
This decision constitutes a first step towards the unification of the existing rates, now three in number: the official rate (15,000 LBP/1 USD), the rate of the Sayrafa platform (which was modified on 01/02/23, from 38,000 to 42,000 LBP/1 USD) and the parallel rate (64,000 LBP/1 USD on 02/02/23). Capped withdrawals from frozen dollar deposits will henceforth be made at the new official rate, which marks the elimination of the intermediate rates of 8,000 and 12,000. In theory, the impact on the Lebanese economy of this decision should be limited, in to the extent that:
– Almost all taxes have already been calculated since the end of 2022 at the rate of 15,000 LBP/1 USD
– Most transactions are carried out at the parallel market rate
– and the economy is increasingly dollarized.
Gas Offshore: Qatar Energy becomes the 3rd partner of the consortium
On January 29, Qatar Energy officially joined the consortium holding the exploration-production licenses for offshore gas blocks 4 and 9.
The Qatari company thus becomes the 3rd partner of the consortium, replacing the Russian company Novatek (20%) which had decided in mid-2022 to leave the consortium.
Qatar Energy now holds a 30% stake in the consortium, alongside TotalEnergies (operator, 35%) and ENI (partner, 35%). The drilling of a first exploration well should be carried out in block 9 by TotalEnergies during the year 2023.
Increase in the current account deficit in the 1st half of 2022
According to the latest balance of payments figures published by Bank of Lebanon, the current account deficit amounted to USD 3 billion in the 1st half of 2022, up 39% compared to the 1st half of 2021 (-2.2 billion USD).
This increase is largely due to an increased trade deficit (+42.6%, -6.2 billion USD), which was not offset by an increase in net tourism receipts (+86%, 2.2 billion USD). USD) or by a slight increase in remittances from expatriates (+1.5%, 3.1 billion USD).
At the same time, the financial account posted a surplus of USD 2.7 billion (+35%), notably due to significant foreign investments in the real estate sector.
Finally, foreign donations are falling, causing a fall in the capital account surplus (-66%, 159 M USD), which reached its lowest level since the first half of 2012.
Source : Embassy of France in Lebanon