New Details About The Lebanese Gold!

New Details About The Lebanese Gold!

| Friday 13 May 2022

Rania Shakhtoura - Akhbar Al Yawm

Despite all the crises and the great financial and economic collapse, it suffers, Lebanon still maintains its position as the second largest holder of gold reserves in the Arab region, with a wealth estimated at 286 tons, amounting to 17.547 billion US dollars until the end of last February.

It is known that gold, which is still considered one of the pillars of Lebanon’s steadfastness, is credited to the late President Elias Sarkis, who, since his accession to the governorship of the Banque du Liban in 1967, started the journey of buying and storing gold, and at that time bought five million ounces for the account of the treasury.

Lebanon is coming back to the fore today, especially after the information that was neither confirmed nor denied, that Deputy Prime Minister His Excellency Al-Shami, during his recent visit to the United States, offered to sell it!

In this context, a seasoned and well-informed economist considers that raising the issue of gold from time to time under the impact of the acute crisis leads to the conclusion of the following points:

- Interest in gold raises question marks.

- What are the intentions of some forces, and is there an intention to benefit from them?

Are the judicial prosecutions of Banque du Liban Governor Riad Salameh relevant to the matter?

Is it possible to approach gold without reforms?

The economic expert stresses, via Akhbar Al Yawm, the need for Lebanon to know what it has and what it has on the level of gold, but the matter is also not separated from the completely ambiguous accounts of the state and its public debt as a result of the absence of cutting the account, which makes all the numbers uncertain.

What, then, are the scenarios for the use of gold? The same expert confirms that there are only two options, selling or leasing.

He says: Selling requires two things:

First: To amend Law No. 42/1986, which states that “it is forbidden to sell Banque du Liban’s gold, directly or indirectly, except by a legislative text issued by the House of Representatives.”

Secondly, the approval of the Central Council of the Banque du Liban, which, besides the ruler, consists of his four deputies and the general managers of the Ministry of Finance and the Ministry of Economy and Trade...

Here, the expert says: It is not yet clear whether there will be a majority in the composition of the upcoming parliament that will raise such a file. As for the Central Council of the Banque du Liban, even if all the members agree, the ruler may not include it on the agenda, unless the pressures exerted on it by initiating lawsuits (rightly or wrongly) do it.

On the internal level, as well as on the external level, there are obstacles, as it is known that one-third of the gold is in Lebanon, while the remaining two-thirds are in the “Fort Knox” castle in the United States, and therefore, according to the same economist, disposing of the part that is in America There are obstacles without it because the authorities in it consider the Lebanese political class to be corrupt and will stand against any project of this kind and will place it under the scope of the Magnitsky Law. In addition, the transactions and accounts of the central banks - which may wish to buy - are exposed to the BIS (Bank for International Settlements). Therefore, there may be an intention to go to countries outside the international financial system to sell the gold in Lebanon, but that will be at a "burnt price".

As for leasing or mortgaging gold, the expert explains that if there is a possibility to use gold, it will be exclusively through the International Monetary Fund, and it is known that the negotiations between Lebanon and the Fund focus on the amount of 3 billion dollars for four years, which is an amount that is not sufficient to rely on it to save The country, and to raise the amount, the IMF may take the gold reserves as a mortgage or as a guarantee in exchange for more loans to Lebanon, provided that the gold remains with it until the dues are paid.

In this context, the same expert says: The IMF may impose harsh measures and unjust conditions, and it may miscalculate sometimes, but, certainly, it will not steal a people, so mortgaging gold will also be in exchange for reforms so that money does not evaporate on fake projects at an astronomical cost.

And the economist concludes by saying: Based on the foregoing, the inability to benefit from gold is still difficult, even if there is a category of the political class trying to market the sale of gold.

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