Is Lebanon close to selling gold reserves? .. The worst scenarios of the crisis

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In a shock that most pessimists did not anticipate about the future of Lebanon’s economy, foreign exchange reserves declined at an unprecedented acceleration during the past 18 months.

By the end of 2019, Lebanon’s average foreign exchange reserves amounted to nearly 52 billion US dollars, including the country’s gold reserves, which amounted to about 13.4 billion dollars in cash, as one of the reserve assets tools that the country avoided, and used in case of crises.

Today, Lebanon’s foreign exchange reserves, not counting gold reserves, do not exceed 16 billion US dollars, the fastest decline in the country’s history, amid an urgent need for foreign exchange necessary for import, and individuals’ need for scarce dollars.

In 2020, Lebanon spent a total of 14 billion US dollars of total foreign exchange reserves, to provide liquidity for the purchase of basic commodities on the one hand, and to provide individual dealers’ need for dollars, amid tight restrictions on the dollar’s exit.

By the end of 2020, Lebanon’s total foreign exchange reserves, excluding gold, amounted to about $24.5 billion, while the reserves at the end of the first half of this year amounted to nearly $16 billion.

Gold balance in Lebanon

The data of the World Gold Council, which was reviewed by Al-Ain Al-Akhbar, also indicates that Lebanon has reserves of raw gold within its reserve assets, amounting to 286.8 tons, ranking 20th in the world among the list of gold holders.

At the end of 2019, the market value of gold reserves, according to the data of the Central Bank of Lebanon, amounted to about 13.9 billion US dollars, before it rose by the end of 2020 to an average of 17.32 billion dollars with the improvement in gold prices.

The total value of gold reserves in Lebanon

By the end of the first half of this year, the total value of Lebanon’s gold reserves declined, according to official data, to an average of $15 billion, with the price of an ounce of gold declining from an average of $1,950 to $1,770.

The spark of the current Lebanese crisis erupted in October 2019, and rolled like a snowball with the passage of weeks and months, to a description given by the World Bank in a report, Tuesday, in which it said that Lebanon’s situation is among the three most severe crises in the world since the nineteenth century.

The total public debt until the end of 2020, amounted to about 85.4 billion dollars, which constitutes 174 percent of the gross domestic product, an increase of 5.3 percent compared to 2019, according to data published on the website of the Banque du Liban.

Customer deposits in the banking sector decreased by 13.1 percent last year to $146.77 billion, compared to $168.9 billion in 2019.

The Lebanese pound collapsed to an average of 17.2 thousand pounds per dollar in the parallel (black) market, compared to 1,510 pounds at the Central Bank, as a result of which consumer prices jumped to unprecedented levels, amid expectations of 100% inflation this year.





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