Regulatory Alerts2025-02-20 | 13703Central Decision No. 13703 on Exchange Operations at Banks and Financial Institutions
Banque du Liban issued Central Decision No. 13703 to amend Basic Decision No. 6568 regarding the foreign exchange position limits for banks and financial institutions. The decision mandates that banks with net open currency positions exceeding 1% of basic net own funds must liquidate breaches in long or short FX positions by December 31, 2025. Non-compliant institutions face a penalty of paying a special foreign exchange reserve at Banque du Liban equal to three times the breach, calculated using the official platform rate and accruing one month per day of delay after the deadline.
Central Circular No. 730 For Banks and Financial Institutions and Supervisory Commissioners
We enclose a copy of Central Decision No. 13703 dated 20/2/2025 regarding the amendment of Basic Decision No. 6568 dated 1997/4/24 (Exchange Operations at Banks and Financial Institutions) attached to Basic Circular No. 32.
Beirut, 20 February 2025 Acting Governor of Banque du Liban Dr. Wissam Mansouri
Central Decision No. 13703 Amendment of Basic Decision No. 6568 dated 1997/4/24
The Governor of Banque du Liban, Pursuant to the Monetary and Banking Law, particularly Articles 70 and 174 thereof, And pursuant to Basic Decision No. 6568 dated 1997/4/24 and its amendments regarding exchange operations at banks and financial institutions, And pursuant to the decision of the Central Council of Banque du Liban taken in its session held on 19/2/2025,
Decrees as follows:
Article One: The text of both the "third" and "fourth" paragraphs of "Article 9 bis" of Basic Decision No. 6568 dated 1997/4/24 is repealed and replaced with the following text:
« Third: If the open FX position is long (Position Open FX Long), a bank with net open currency positions exceeding 1% of total basic net own funds is considered in breach. Banks are granted a maximum deadline of 31/12/2025 to liquidate any breach in net long currency positions, under penalty of paying a special foreign exchange reserve at Banque du Liban amounting to three times the breach, calculated based on the official exchange rate published on the platform approved by Banque du Liban, for one month per day of breach after 31/12/2025. Fourth: If the open FX position is short (Position Open FX Short), the bank is considered in breach and must liquidate this breach within a maximum deadline of 31/12/2025, under penalty of paying a special foreign exchange reserve at Banque du Liban amounting to three times the breach occurring based on the ratio defined in this "fourth" paragraph, calculated based on the official exchange rate published on the platform approved by Banque du Liban, for one month per day of breach after 31/12/2025.»
Article Two: This decision takes effect upon issuance.
Article Three: This decision is published in the Official Gazette. Beirut, 20 February 2025
Acting Governor of Banque du Liban Dr. Wissam Mansouri