BEIRUT: Central bank Governor Riad Salameh renewed confidence in the performance of the Lebanese banking sector Thursday, citing the International Monetary Fund’s expectations of a GDP growth rate reaching 7 percent during 2009, if the recent revival in lending activity is preserved. According to the latest weekly monitor study issued by Bank Audi, total loans of commercial banks progressed by LL1,381.3 billion during the month of July alone, surpassing the growth in loans during every month since February 2008, bearing in mind that, in 2008 and prior to the outbreak of the crisis, Lebanese banks were following an aggressive lending strategy.

“The balance of payments surpassed $3 billion for the first seven months of the 2009 and the monetary situation is very positive,” said Salameh.

The same report issued by Bank Audi reported that the sturdy influx of capital into the country over the first seven months of 2009 resulted in a cumulative balance of payments surplus of $3,347.4 million, a record high for Lebanon, and up from a surplus of $1,611.2 million in the first seven months of 2008.

It said the cumulative surplus in the first seven months of 2009 is the result of a rise of $5,033.1 million in net foreign assets of the central bank, which more than offset the decline of $1,685.7 in those of banks and financial institutions.
Salameh said the dollarization rate reached 67 percent, which reflects great trust in the monetary situation in the country and the Lebanese pound.

His remarks came during the monthly meeting of the Lebanese banks association.

He lately disclosed that up to $16 billion of cash came into Le banon over the past 12 months, 90 percent of which was converted into Lebanese pounds.

He reiterated that the central bank will continue to uphold the same monetary policy be cause preserving the Lebanese pound has become the cornerstone of stability.

Salameh also praised the Lebanese banks’ favorable reaction to the regulations issued by the central bank concerning housing loans and the other new projects including environmental and educational ones in re turn of the cancellation of man datory reserves. – The Daily Star